If This Holds, There Will Be a Lot of Nervous Investors Soon
Posted on June 28, 2007
Filed Under Real Estate Investing |
Court Rules, Feds can seize half a house.
If this holds, the investors who use a trust and leave the seller with a small percentage of beneficial interest are going be a little nervous. See, they were sold a bill of goods thinking part of an undivided asset couldn’t be attached.
But, if it can be seized, it can be attached.
This will be interesting to watch!
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5 Responses to “If This Holds, There Will Be a Lot of Nervous Investors Soon”
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Oh Boy. This definitely will be interesting to follow. suprising story though…
It certainly will be interesting. Trusts are a great vehicle for real estate investors but the companies telling you they are “bullet-proof” and can’t be attached, etc. Are all full of bull squeeze.
My brother and I use trusts all the time to buy and hold real estate. I think the ones who have the most to worry about are those using Gatten’s method. Since we never allow the seller to retain any of the beneficial interest, this ruling won’t affect the way we do business. But, then we aren’t looking for the trust to do anything other than not make it obvious to the lender we assumed the loan.
Tim is the only guy that has a handle on what is true. The IRS always could have divided any interest. I draft land trust and in fact I have done well in excess of 900 over the last 2 years. Never has your concerns ever concerned any of our clients. The courts can’t divide the interest the way we structure the trusts and for most people the courts are the bigger worry. In the end, its all about how the trust is structured. Good work Tim.
Robert,
Courts can pierce or void trusts with ease. There isn’t a trust that has ever been drafted that a court, under the right circumstances, could void, set aside, ignore, strip, pierce, etc.
A trust is just a contract and as such is subject to interpretation by courts of proper jurisdiction.