Go Back
by Randy Hughes on November 08, 2008
Most everyone who studies Land Trusts knows that the Beneficial Shares (the interest held by the Beneficiary) are assignable by the Beneficiary to a third party. But, what is interesting to note is that the assignment is NOT valid until accepted by the Trustee. The Trustee may require seeing the original assignment with witnesses, notaries or both to confirm the transaction.Since the Power of Direction is typically transferred along with the Beneficial Share, it is critical that the above formalities be observed so the Trustee may accept the new owner as a Director of the Trust too!This historical legal procedure has evolved to prevent fraud on the Trustee AND the Beneficiary by an individual who might fabricate an Assignment form in the attempt to steal the property.What is interesting about all of this from an asset protection standpoint is consideration of a judge ordering the transfer of Beneficial Interest to the creditor of a debtor in default (as judgment relief). If the judge orders the Beneficial Interest (BI) holder to assign the BI over to his/her creditor, the assignment will not be legal until the Trustee accepts it. If the Trustee resides outside of the jurisdiction of the court (requiring the transfer), the transfer may never be effectuated.Check Mate!
