Bare Trust Agreement Real Estate
Also known as single trusts or bare trusts, bare trusts are often used by parents and grandparents to transfer assets to their children or grandchildren. Cash trust rules allow beneficiaries to decide when they want to recover the trust`s assets as long as they are at least 18 years old in the UK. Recipients can use the capital and income they inherit from a simple trust as they see fit. This article provides a very broad overview of the nature of trusts and why they are sometimes used in real estate. If you are considering buying or lending money guaranteed by real estate, please contact a member of the Houser Henry-Syron LLP team to discuss how best to structure your transaction. The use of bare trusts to circumvent the land transfer tax is a particularly useful method in B.C., where prices are high and PTT considerable. Nevertheless, it is always advisable to stay abreast of government policy. In Budget B.C.-Budget 2016 and 2018, certain measures were taken to request information on the economic beneficiary. While this may indicate regulatory intentions, the use of bare trusts for this purpose has not been eliminated and remains a viable option. Another point to keep in mind is that the laws to impose the TPP and the LTT vary from municipality to municipality. Your first step should be to ask your estate planning company if this is the right strategy for you. In some cases, yes. What for? Some institutions are not able to hold registered ownership of the land.
Partnerships are an example. When a partnership chooses to own land, it must appoint an agent with a registered title. If necessary, Addy establishes partnerships, which is why addy is the name of the agent on the registered title. There are many circumstances in which simple trust is wise, especially for parents who trust in the financial responsibility of their child beneficiaries. They can also be used strategically in real estate. One of the most important acquisition costs for the sale of real estate is the property transfer tax or, in some areas such as British Columbia, the property transfer tax. You may remember our last article on this subject. When a land is held as a single trust, its effective owner can be transferred between the parties without a new title registration. This effectively avoids PTT.
The bare trust company is the one that is actually listed on the title, the name of the company is registered in the office of the country title (“LTO”). Trusts are one of the most practical and flexible financial planning tools available to families today, particularly in terms of estate planning. There are a lot of types to choose from, but right now we want to focus on bare trusts.