Well at least you are now being specific and concise as to which realm, reality or construct you are referring. The discussion previously was trusts generally and real estate generally.Originally Posted by Michael Joseph
However, 'land trust' (word of art) refers to what is widely regarded to be a purely statutory construct--like a corporation. The fact that specific requirements must be undertaken to even be recognized under a state's statute is telling: "Well call it a trust if you do this, that, the other and if the land is 'in this state'". Depending on the asset or property focus, a 'land trust' is really not a de jure trust. However if you consider the state as landlord doing the authorization and approving you might have a kind of delegation or agency rather than a real trust relationship especially if probate is triggered.
Most will at first, when looking at land trusts, will probably fixate solely on the title to real property as being the totality of a land trust when in fact the proceeds, rents, fruit, productivity of the land would be also be part of the totality of the 'trust estate(s) associated with a land trust. That 'fructive' portion could sit separately in trust on 'occurrence' and be held in de jure trust: when and if it manifests.
So if you are talking about the statutory construct called 'land trust' then the discussion is on those specific terms. Being that is possible to have capital and revenue separated in a trust you get how the revenue or 'fructive' side of a trust package can be in a trust-trust while the capital equipment can be in a separate sham trust (for example it could be a requirement that as long as its generative of the fruit its treated *as if* its not a sham). So saying "one part of the trust is held with legal title and equitable title" so "neener-neener its a trust I done told ya!"isn't quite on point.
In fact anyone who knows about land trusts will see that they typically arise out of two separate documents (meaning two separate trusts--of which only one is probably de jure): a deed and a trust agreement. The grantor trust is widely regarded as a 'sham trust'. But if the federal or non-federal state (Garn Act, local statute) wants to treat a grantor trust as a trust-trust its still a sham though they agree to pretend otherwise. If the real property side of the land trust (special arrangement which might in many cases be two separate trusts put together in a single package) is a sham and the state (landlord) says Okee Dokey its still not really a trust. However, the trust arrangement on the fructive side, on occurrence of the fruit/revenue can be de jure.
If I didn't give MJ such a hard time, how much fun would this be?
To recap, if I were to assign Bubba Skillz some equipment for making Formula Z that sells for $100 an ounce and tell him that the only reason he will hold the equipment is to produce Formula Z for my cousin's company and he'll get paid 10% per ounce and my cousin gets the rest, you see how the equipment is still mine (grantor trust/sham trust--not a trust really) but the Formula Z as it is produce is in fact in trust. To fixate on the title to the equipment is to miss the point that the de jure trust surrounds the title to the Formula Z as it is produced. The state calling non-trusts trusts with respect to title to the equipment is besides the point. The terms might be that once Bubba Skillz retires, the equipment reverts back to me and my will or the like might pass the equipment on to my sons or daughters--so much for the trustee having allodial title.
It may be that with analysis that the equipment or real property side of that trust arrangement is allowed to operate more like an perpetual estate as if the grantor were deceased. If the state has allodial title to the real property in the state of Florida or in the state of Illinois then, hmm the smell of a delegation or side-band principal-agency type of arrangement might not be far off. The restriction that the typical trustee has with respect to real property concerning a land trust doesn't sound like full title. One or both halfs of the legal title are very weak--too weak to be de jure full title. The fact that point #1 in your first PDF suggests that a beneficiary has title interest in bankruptcy is also telling.
Of course the topic of 'land trusts' varies from state to state. Also, its worth considering that in one jurisdiction or another, according to statute a beneficiary's equitable title in the real property associated with the land trust trust collection is treated as if personal property can mean that the trustee doesn't really have equitable title but is only treated AS IF having such. If the beneficiary's consent is built into it, again that can give rise to something else like principal-agency type relationship rather than a trust. Its probably not unheard of for rights to be treated as real property.
On another note, if one were to analyze the nature of corporations, one just might find evidence of a trust agreement lurking in there somewhere upon incorporating.
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