Land Trusts in Michigan?

[Karen Egypt]

I plan to buy and lease property in Michigan with a few of my friends.  I have recently heard about purchasing and leasing property using a land trust.  Has anyone successfully used this in Michigan?

[Randy H.]

Karen,

You are smart to investigate ways of holding title without using your own personal name. There are NO reasons or advantages to owning investment real estate in your name...only negatives (liability, tenant problems, frivolous lawsuits, etc.). Land Trusts are perfectly legal to use in Michigan, but the problem is finding a title company that will insure the transaction. Since most title companies in MI are not familiar with how a land trust works, they refuse to insure. So, you could close the deal in your name and then transfer to your land trust as an alternative. Be sure to read your title policy and see if the coverage extends to your "agents." Even though the Trustee of your land trust is NOT the agent of the beneficiary...some title companies consider them as such and will extend coverage to them. I use Chicago Title exclusively and they do consider the Trustee of your Land Trust a agent of the insured.

Hope this help you!