The following is a review of the law of land trusts in all fifty states (source: Report of the American College of Trust and Estate Counsel, Validity of Illinois Land Trusts, August 2, 1993.):
Alabama. Land trusts are specifically authorized by state statute in Alabama. See, Alabama Code Sections 35-4-250 through 35-4-251. The trust is valid so long as the trustee has some active duties, such as collecting rents, exercising discretion in the management of the property and/or taking possession of the trust property.
Alaska. There are no state statutes or cases dealing directly with land trusts.
Therefore, it would be safer to err on the side of caution and use the
land trust agreement with the addendum (Alaska law requires the
registration of all living trusts, but the penalty for not registering
is inconsequential. See, Alaska Statutes Section 13.36.005).
Arizona. There is no land trust statute, but there is case law directly authorizing
land trusts, so long as the trustee has some active duties. See, Lane
Title and Trust Co. V. Brennan, 440 P .2d 105 (1968). Arizona law
requires the disclosure of beneficiaries and any change of
beneficiaries, but the penalties for failing to do so are, for the most
part, inconsequential. See, Arizona Revised Statutes Section 33-404.
Arkansas. There is no land trust statute, but there is case law impliedly authorizing land trusts, so long as the trustee has some active duties, such as signing leases, paying taxes and distributing income. Smith v. Wright, 779 SW2d 177 (1989); See also, Murray v. Hale, 203 F. Supp. 583 (E.D. Arkansas, 1962) ( In the absence of a statute to the contrary, the owner of property may create a trust therein for any lawful purpose for which he may deem wise or desirable and the trust may be created for his own benefit as well as for the benefit of another ).
California. There is no land trust statute, but California does not follow the Statute of Uses. At least two California court cases have expressly recognized the validity of land trusts. See, Walgren v. Dolan, 276 Cal.Rptr. 554 (1990), In Re Tutules Estate, 22 Cal.Rptr. 427 (1962). Some title companies in California refer to a land trust as a title holding trust.
Colorado. There is no land trust statute. Support for land trusts are implied from Board of County Commissioners v. Howard, 640 P.2d 1128 (1982). There are conflicting decisions in Colorado regarding what duties of the trustee are necessary. See, e.g. OReilly v. Balkwill, 297 P.2d 263 (1 956)(Trust agreement where trustee s only duty was to quitclaim property to beneficiaries upon demand is insufficient to create an active trust); But, see, Reed v. Munn, 148 F. 737 (8th Cir. 1906) (Authority of trustee to sell or lease trust property at the direction of majority of the beneficiaries is sufficient to create an active trust). More recent cases have held that a revocable, living trust is valid even though the settlor retains extensive control over the administration of the trust property. See, e.g., Exchange National Bank v. Sparkman, 554 P.2d 1090 (1976). A trust in Colorado may (and should) hold title to property in its own name, but must file a "trustee's at afidavit" See Colorado Revised Statutes Section 38-30-166.
Connecticut. There is no state statute, but all trusts require active duties of the trustee to avoid the statute of uses. The specific duties required of a trustee to are not well defined by Connecticut law. See, e.g., Goytizolo v. Moore, 27 Conn.App. 22 (1992).
Delaware. There is no state statute. There is case law impliedly authorizing land trusts, so long as the trustee has some active duties. See, e.g., Marvel v. Wilmington, 87 A. 1014 (1913).
District of Columbia. There is no land trust statute. D.C. Code Annotated /451101 implies support for the use of any trust so long as the trustee has some power of actual disposition. See, also, Liberty National Bank of Washington v. Smoot, 135 F. Supp 654 (Dist Ct. ofD.C 1955).
Florida. The Florida legislature specifically authorizes land trusts. See, Fla. Stat.
Sections 689.07 through 689.071. Any active duties of the trustee will
be sufficient to validate a land trust. A property held in a land trust
does not qualify for Ad Valorem tax treatment. Opinion of the Florida
Attorney General 94-50, June 2, 1994.
Georgia. Specifically authorized under state statute. See, Official Code of Georgia Annotated, Sections 53-12-50 through 53-12-59. Any active duties of the trustee are sufficient to sustain the trust. Interest in a land trust may be evidenced by certificates, which are treated the same as corporate shares under Georgia law.
Hawaii. Specifically authorized under state statute. See, Hawaii Revised Statutes Section 558-4. Any active duties of the trustee are sufficient to sustain the trust. The only glitch with the Hawaii law is that the names of the beneficiaries must be disclosed. If the property owned by the trust is in violation of any law or ordinance, the trustee is required to disclose the names of all beneficiaries and is not subject to civil liability for so doing. See, Hawaii Revised Statutes Section 558-8.
Idaho. There is no land trust statute. A trust is considered active so long as the trustee s instructions at least imply an affirmative duty on trustee to preserve and manage the trust property. Garner v. Andersen, 527 P.2d 1264. Idaho requires the registration of all living trusts.
Illinois. Specifically authorized under state statute. See, Illinois Revised Statutes Chapter 110, Section 15-1205, Chapter 148, Sections 60-84. In addition, Illinois has a long body of case law to support the use of land trusts. See, e.g., Robinson v. Chicago National Bank, 176 N.E.2d 659 (1961).
Indiana. Specifically authorized under state statute. See, Indiana Code Sections 30-4-2-7 through 30-4-2-14. The beneficiary may manage the property or give the power to manage to the trustee so long as the trustee has some power related to the administration of the trust.
Iowa. No specific land trust statute. Trustee must have title, control and power to collect rents, receive profits and execute leases and mortgages to satisfy the statute of uses. Olsen v. Youngerman, 113 N.W. 938 (1907); See also, Keck v. McKinstry, 221 N.W. 851 (1928)(Statute of Uses not violated if settlor retains power of management while still alive).
Kansas. No land trust statute. Support implied by K.S.A./58-2413 (trust considered active if trustee has power of disposition and management). See also, Land TrustsAdaptability to Kansas Real Estate Practice, 14 Kansas Law Review 97 (1965).
Kentucky. No land trust statute. Trust agreement requires a
statement of active duties of property management. Winn v. William, 165
S.W.2d 961 (1942). It is not clear under Kentucky law what specific
duties are required.
Louisiana. Valid under Louisiana law,
with one caveat - Louisiana does not appear to recognize the
designation of the beneficiary s interest as personalty. See, Charles
Land Trust v. St. Armant, 217 So.2d 385 (1968). You may still consider
using land trusts in Louisiana for privacy purposes, but not
necessarily for protection from judgments (Since the interest under a
land trust in Louisiana is considered realty and not personalty, a
judgment against the beneficiary will attach to the realty).
Maine. No land trust statute. Trust agreement requires that trustee have some power of management, preservation, power of sale or duty to pay expenses. Dixon v. Dixon, 124 A. 198 (1924). Maine requires the registration of all living trusts.
Maryland. No land trust statute, but Real Property Law ;2-116 requires that the trustee have some express power of management or disposition.
Massachusetts. No land trust statute, but expressly recognized by case law. New England Mutual Life v. Grant, 56 F.Supp. 193 (D. Mass 1944)(No duty required of trustee other than to convey the property to the beneficiary upon demand). Land trusts are referred to as "Nominee Trusts" in Massachusetts.
Michigan. No land trust statute, but expressly recognized under case law. Rose v.
Rose, 1 N.W.2d 458 (1942).
Minnesota. There is no land trust statute, but Minnesota Statutes
/501B.Ol states that an active express trust may be created for any
lawful purpose. Section 501B.02 abolishes passive trusts. Any active
duties of the trustee are sufficient to validate a trust in Minnesota.
Mississippi. No land trust statute, but all trusts (or transfers of
beneficial interest in trust) must be registered to be effective!
M.C.A.19l-9-1. Registration requires filing disclosing the name of the
grantor, but not the beneficiary. Case law implies support for land
trusts so long as trustee has some active duties such as managing,
collecting rents, paying taxes, repair and upkeep. Western Union v.
Rhett, 50 So. 696 (1909).
Missouri. No land trust statute. Any powers of management, sale, lease, mortgage or disposal are sufficient. M.R.S. /456.020; Maxwell v. Growney, 213 S.W. 427 (1948); Matthews v. Vancleve, 221 S.W. 34 (1949) ..
Montana. No land trust statute and case law is not clear. The Montana Probate Code, however (M.C.A. #72-33-201 et seq. ), is based on California s Probate Code, which permits trusts so long as the trustee has some active duties. Montana courts traditionally follow California law on trusts (See In Re Strode s Estate, 167 P.2d 579).
Nebraska. No land trust statute. Trusts are considered active so long as the trustee has some affirmative duties, such as control, management, leasing and sale. Cahill v. Armatys, 177 N.W.2d 27 (1970); Jones v. Shrigley, 33 N.W.2d 510 (1948).
Nevada. No land trust statute. Sections 73 and 74 of the Nevada Probate Code do support revocable, intervivos trusts in general. NRS Section 163 states that a trust may be created for any lawful purpose and that a trustee may be relieved of many of his duties by the settlor or beneficiary.
New Hampshire. No land trust statute. The Statute of Uses does not apply to trusts in which the trustee has duties that require discretion. Bellows v. Page, 188 A. 12 (1936).
New Jersev. No land trust statute, but N.J.S.A.?46:3 through 46:9 requires only that the trustee have some power to mortgage, sell, or lease the property, even if only at the beneficiary s direction. Martling v. Martling, 39 A. 203 (1898).
New Mexico. No specific land trust statute, but cases have implied support for land trusts. See, Wollard v. Sulier, 232 P.2d 991 (Where realty is given to trustee with a direction to sell and distribute proceeds, the trust subject-matter is treated as personal property). New Mexico requires the registration of all living trusts. Note: Do not confuse the common law land trust with the real estate investment trust authorized by Section 47-2-1 of the New Mexico Code!
New York. There is no specific land trust statute, but section 7-1.4 of the New York Estate Powers and Trusts Law states that a trust may be created for any lawful purpose. This alone may be legislative authority for land trusts in New York. See, G. Bogert, The Law of Trusts & Trustees/250 at 102 (2d ed 1964); 45 Notre Dame Lawyer 427,461 (1970). New York courts, however, apply strictly the Statute of Uses on trusts. The trustee would need not only the duties of collecting rents and profits, but the duty to exercise discretion in the exercise of his duties. Land Trusts in New York, 37 St. John s Law Review 123 (1962).
North Carolina. No land trust statute, but any duties of the trustee are sufficient to create a valid trust. Finch v. Honeycut, 975 S.E.2d 478 (1957).
North Dakota. Specifically authorized by state statute. See, NDCC Section 59-0302. No special duties required of the trustee other than holding legal and equitable title. North Dakota requires the registration of all living trusts.
Ohio. Specifically authorized by state statute. See, Ohio Revised Code Sections 5301.03, 1335.01 and 1335.04. No special duties required of the trustee other than holding legal and equitable title.
Oklahoma. No land trust statute, but O.S. Chapter 61175.5 validates all trusts where the trustee has some power of actual disposition. Furthermore,1175.6a declares a trust to be a legal entity which can hold title to real estate in its own name.
Oregon. No land trust statute. Oregon law applies the Statute of Uses strictly, requiring the trustee to exercise discretion and have the power to control, protect, manage and dispose oftrust property. Lee v. Melone, 527 P.2d 414 (1974).
Pennsvlvania. No land trust statute. Trustee must have the express or implied duties of collecting profits, paying taxes, assessments, repairs and other expenses. Sheasley Trust, 77 A.2d 448 (1951 )(Duty to pay net income to beneficiaries implies discretion, however slight). Transfers of property into a land trust, even for one's own benefit, may be subject to real property transfer tax. See, House Bill 134.
Rhode Island. No land trust statute. The law only requires that the trustee have the duty to convey title at the discretion of the beneficiary. Read v. Power, 12 R.I. 16 (1878); Koehne v. Beattie, 36 R.I. 316 (1914).
South Carolina. No land trust statute. The law only requires that the trustee have the duty to convey title at the discretion of the beneficiary. Ramage v. Ramage, 322 S.E.2d 22 (1984).
South Dakota. No land trust statute, but S.D.C.L. ;,143-10-1 through 43-10-4 validate trusts so long as the trustee has some active duties of management and discretion. Case law has expressly recognized the land trust as a valid device. Bank of Cody v. Fanning, 353 N.W.2d 352 (1984)(Power of trustee to convey under express trust agreement vests all title in trustee and judgment against beneficiary will not attach to realty).
Tennessee. Tennessee does not recognize land trusts. See, Kelly v. Schwartz, 740 S. W.2d 719 (1987).
Texas. No land trust statute. V.C.T.A. /112.032 requires some active duties of management to validate a trust. See also, A Device for Land Development: The Illinois Land Trust, 10 Houston Law Review 692 (1973).
Utah. No land trust statute and no clear law on the duties required of a trustee to satisfy the Statute of Uses. Chapter 75 of the Utah Probate Code does support the use of revocable, intervivos trusts in general.
Vermont. No land trust statute. The Statute of Uses is not in effect in Vermont, so any duties of the trustee will suffice. Noyes v. Noyes, 9 A.2d 123 (1938).
Virginia. Specifically authorized by state statute. See, VCA Section 55-17.1. No special duties required of the trustee other than holding legal and equitable title.
Washington. No land trust statute. The Statute of Uses require some active duties, such as the payment of taxes and distribution of funds to beneficiaries. Townsend v. Ranier National Bank, 751 P .2d 1214 (1988). Washington does not recognize the doctrine of equitable conversion. Estate of Phillips, 874 P.2d 154. Thus, it is not clear whether the court will respect the settlor s intention of creating a personal property interest in the trust.
West Virginia. No land trust statute. W.V.C./36-l-l7 only requires some duty of care, management or disposition. See also, Rogerson v. Wheeling Dollar Savings & Trust Co., 222 S.E. 2d 816 (1976).
Wisconsin. No land trust statute. Land trusts are expressly
recognized by case law. See, e.g., Kinzer v. Bidwell, 201 N.W.2d 9
(1972). Only duty required of trustee is
to pay property taxes. McMahon v. Standard Bank & Trust, 550 N.W.2d 727 (1996).
Wyoming. No land trust statute. Wyoming Statutes J2-3-30l through 2-3-304 and ;,14-8-1 0 1 through 4-8-109 require some duty of the trustee other than taking title and possession of the property.
In addition to the statute of uses issue, you must comply with state law regarding the filing of public documents. The sample forms for deeds and affidavits are suitable for most states, although you should review them with your local attorney or title company before filing. Pay particular attention to the form of notary acknowledgment, whether the document requires a witness and whether it is required that the name of the drafter of the document be noted.
