When creating a simple single beneficiary land trust for just the purpose of shielding ownership from public view, one can legally name just about any one or any entity he/she would choose to function as a trustee.  However, when more than one beneficiary (i.e., a trust involving other parties with disparate interests and objectives) is involved, there are severe drawbacks to using any entity other than a third-party, non-profit, corporate trustee.

USING A FRIEND OR RELATIVE AS TRUSTEE

Risky and quite probable failure to honor privacy and anonymity, especially  under threat of legal action.

An individual trustee’s failure to charge a fee would not support the land trust’s validity in court.  The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.

An individual trustee’s death would embroil the property in his/her own bankruptcy, Probate and other personal legal actions.

An individual would most likely never be bondable as a trustee and would likely not have the resources to provide a completely separate, free and bonded collection and bill-paying service.

An individual would not be seen by the courts as a standard trustee, charging fees “commensurate with industry standards”:  therefore severely  impairing the integrity and structure of the land trust. 

One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary as a mutually trustworthy holding entity.  Such likely bias obviously would not be in the best interests of any of the co-beneficiaries


ONE’S SELF AS TRUSTEE

Risky and quite probable failure to honor privacy and anonymity, especially  under threat of legal action.

An individual trustee’s failure to charge a fee would not support the land trust’s validity in court.  The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.

If a trustee is also a beneficiary, a merger of title is created  (see Doctrine of Merger), invalidating the trust if challenged in court as being a bona fide land trust.

An individual would most likely never be bondable as a trustee and would likely not have the resources to provide a completely separate, free and bonded collection and bill-paying service.

An individual would not be seen by the courts as a standard trustee, charging fees “commensurate with industry standards”:  therefore severely  impairing the integrity and structure of the land trust.

One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary as a mutually trustworthy holding entity.  Such likely bias obviously would not be in the best interests of any of the co-beneficiaries.


USING ONE’S ATTORNEY AS TRUSTEE

Using one’s own attorney would perhaps not pose a  problem as long as no other unrelated beneficiaries were involved who would have separate and independent interests and financial objectives within the arrangement.

An individual trustee’s failure to charge a fee would not support the land trust’s validity in court.  The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.

An attorney or law firm would most likely not be bonded as a trustee for land trusts; though his/her malpractice insurance may suffice as protection against malfeasance and/or errors and omissions.

An attorney or law firm would likely not be recognized as a bona fide trust holding institution by any court that would be challenging the integrity and purpose of a a co-beneficiary land trust title transfer.

One’s own attorney would not create a mutually trusted, unbiased third-party “escrow” entity.  A biased attorney (acting in primary favor of a client) could wreak havoc in a contest involving dissention between/among beneficiaries.


USING ONE’S OWN CORPORATION

Would create a merger of title, invalidating the trust, should it be challenged in court as not being a bona fide land trust (see N.C. A.G.O. vs Russell and Dianne Barberio 2005)

A privately or closely held corporation would not charge legitimate fees and therefore would not likely be seen by the courts as a bona fide holding company, whose business it is to hold titles in trusts and charge fees commensurate with industry standards.

One’s own corporation would not be seen by a co-beneficiary as a mutually trustworthy,  and wholly unbiased third-party holding (“escrow”) entity.  Such a bias would not be in the best interests of co-beneficiaries.  As well, using one’s own business entity would create a merger of title invalidating the land trust model.


USING AN OUTSIDE CORPORATION AS TRUSTEE

In virtually all states, any corporation used as a holding company must be either: 1) one’s own corporation (see above), 2) a chartered depository trust institution (e.g., Bank and Trust, Title and Trust, etc.) or, 3) a non-profit, charitable corporation established solely for the purpose of holding titles to real estate in trust for the benefit of its members.


The Third Party Non-Profit Corporation

A professional non-profit entity specifically and solely engaged in the holding of titles in land trusts.  Fully staffed by full-time knowledgeable professionals.

A reasonable trustee fee is charged, which is well in line with industry standards is charged, enabling the creation and funding of an un-paid 3rd-party collection & disbursement entity (a free bill paying service for the benefit of members).

Cannot die (re. Probate issues), and is well backed financially to allow for careful adherence to all laws. rules and regulations relative to reporting and maintenance of a consistently good standing with the state.

Fully bonded as a trustee for title holding, beneficiary directed, 3rd party trustee nominee title-holding land trusts.

Fully recognized as a bona fide holding institution by any court that would/might be challenging the integrity and structure of the land trust or holding to adherence to statute and or standards in states wherein land trusts per se are specifically legislated and authorized

Functions a fully unbiased and unassociated third-party title holder (“escrow-type)” holding entity.