A land trust is a legal entity that holds title to real property for the benefit of a named beneficiary. The trustee — often a bank, title company, or attorney — holds bare legal title, while the beneficiary retains all the practical benefits of ownership: the right to occupy the property, collect rent, direct the trustee to sell or mortgage it, and receive all proceeds. The key advantage is privacy — the trust name appears in public records instead of the beneficiary's personal name.
Land trusts are particularly popular in Florida and Illinois, where state law specifically recognizes and facilitates them. In Florida, Chapter 689.071 of the statutes provides the legal framework for land trusts, establishing that the trustee's only powers are to hold title, execute conveyances, and execute mortgages as directed by the beneficiary. The beneficiary maintains full control — the trustee acts only at the beneficiary's direction.
Beyond privacy, land trusts offer several practical advantages. Transferring ownership is simplified — the beneficiary interest can be assigned to a new party without recording a new deed, saving on documentary stamps and transfer taxes in some situations. Multiple properties can be held in separate land trusts, providing liability isolation — a lawsuit related to one property does not directly affect properties held in other trusts. And for investors who own many properties, land trusts prevent public records from revealing the full extent of their holdings.
At closing, transactions involving land trusts require additional documentation. The title company needs a copy of the trust agreement (or a certification of trust) to verify the trustee's authority and confirm the beneficiary's identity. If the trust is purchasing, the deed names the trustee as grantee (e.g., "ABC Bank, as Trustee of Land Trust No. 1234"). If the trust is selling, the trustee signs the deed as grantor, and the title company verifies they have authority under the trust agreement.
At Beycome Title, we have extensive experience handling land trust transactions — both for individual homeowners seeking privacy and for investors managing portfolios. Our title team ensures all trust documentation is properly reviewed and that the closing complies with your state's specific land trust statutes. Get your free title quote today.