Pros and cons of buying real estate in a trust

[SPeever]

Hello All:

I am interested in hearing your opinions on buying real estate in trusts. For example, what are the pros and cons of buying in trust for a corporation, for example. I understand that there are more disadvantages associated with buying in a corporation but less if it is in trust for a corporation. If so, who sets up a trust and how worthwhile is it to do this?



Thank you.

 

[Thomas Beyer]

Trust have an expiry date in Canada, after 20 years. It is also harder to get a mortgage, and you will have to personally guarantee it, negating the benefit of limited liability of a trust. It will also cost annual accounting and filing fees, thus it makes sense only for larger assets (say $1M plus). A capable lawyer can set it up. Main benefit is the change of beneficiaries, i.e. separation of beneficial and legal ownership.

 

[SPeever]

Hello Thomas:



Thank you very much for this information. Why do people buy properties in trusts if the liability is still existing? Are there major advantages?

 

[Thomas Beyer]

Buying in a trust is not common in Canada. Reread my post as I listed the major advantage, namely the ability to change beneficiaries. It may also be beneficial for a minor, say on inheritance !

 

[SPeever]

Thomas:



Thank you very much once again.