Should You Purchase Property Investments as a Real Estate Trust?

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Should You Purchase Property Investments as a Real Estate Trust?
Real Estate

When looking to make money from real estate investment, there are a number of avenues one may take. The two large categories are, essentially, purchasing property under one’s own name, or purchasing it under the name of a separate entity—whether a limited liability company (LLC) or a real estate trust.

These options each have their attendant pros and cons, mainly having to do with the scope of an owner’s protection from liability and anonymity. The latter is a chief benefit of choosing to invest via real estate trust—particularly where there is more than one owner intending to invest in the property (or properties).

Real estate trusts are a sort of legal conveyance created as a means to pass assets. Rather than individual owners purchasing a property, a trustee will hold title to the property on behalf of (and for the benefit of) at least one beneficiary.

Whether it is the best option for an investor will depend on their goals. For example, where an investor intends to ensure the passage of their property after death while avoiding death taxes, transferring the property to their heirs via real estate trust is a legitimate way to do so, though the rules around how much property can be put into such a trust are subject to frequent alteration. And where more than one owner would like to invest in a property, a trust can serve to document the ownership interests of all those involved in a way that avoids partitioning the property.

Then there’s the anonymity. It isn’t as strong of an incentive for this form of ownership as it once was for individual owners. The increasing public availability of deeded trust and tax information, particularly online, has done a lot to decrease this protection. Yet real estate trusts do continue to serve this purpose to a greater degree where multiple owners gather their interests together.

If you’re looking to invest in property in Mesa or anywhere else in the state of Arizona, call us to consult with an experienced attorney with strong scruples. At ProvidentLaw, our real estate attorneys represent parties on either side of real estate and financing transactions, including landlords, tenants,buyers, sellers, lenders, borrowers, trustees, guarantors, shareholders, partners, and others. We structure, negotiate and document a variety of real estate and financing transactions, such as leases, purchase and sale agreements, loans and development agreements for a variety of commercial and residential projects. Contact us for more details.

Christopher J. Charles is the founder and Managing Partner of Provident Law ®. He is a State Bar Certified Real Estate Specialist and a former “Broker Hotline Attorney” for the Arizona Association of REALTORS ® (the “AAR”). Mr. Charles holds the AV ® Preeminent Rating by the Martindale-Hubbell Peer Review Ratings system which connotes the highest possible rating in both legal ability and ethical standards. He serves as an Arbitrator and Mediator for the AAR regarding real estate disputes; and he served on the State Bar of Arizona’s Civil Jury Instructions Committee where he helped draft the Agency Instructions and the Residential Landlord/Tenant Eviction Jury Instructions.

Christopher is a licensed Real Estate Instructor and he teaches continuing education classes at the Arizona School of Real Estate and Business. He can be reached at or at 480-388-3343.

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