To set up a land trust, you draft a trust agreement naming a trustee and beneficiary, sign and notarize it, then record a new deed transferring your property from yourself to the trustee. The paperwork can be done in a few days with a template or a few weeks with an attorney, and the trust doesn’t actually hold the property until the new deed is recorded with the county. Everything else, from choosing the trustee to notifying your lender, sits around those two documents.
Decide the Key Terms Before You Draft
The choices you lock in now determine whether the trust does what you want. Work through them before anyone writes a word of the agreement.
Pick a Trustee and a Successor
The trustee holds legal title and manages the property under your instructions. You can name an individual (a friend, family member, or yourself in some states), a corporate trustee such as a bank or trust company, or a combination. An individual trustee keeps costs low but creates problems if that person becomes incapacitated or uncooperative. A corporate trustee charges ongoing fees and offers professional management, impartiality, and continuity. Whichever you pick, name at least one successor trustee who steps in if the primary can no longer serve.
Spell Out How the Property Will Be Handled
The agreement needs to say how the property is managed, how any income like rent gets distributed, and what happens when the trust ends. If you have more than one beneficiary, decide each person’s share upfront. Set the trust’s duration or the conditions that terminate it. Some states cap how long a trust can last, so confirm your state’s limit.
Pull Your Documents Together
You need the full legal description of the property, which appears on your current deed. That’s the formal boundary description, not the street address. Collect names, addresses, and contact information for every party involved: grantor, trustee, successor trustee, beneficiaries, and successor beneficiaries. In a typical land trust, the grantor and the beneficiary are the same person, so you keep control while the trustee’s name is what appears on the recorded deed.
Draft and Sign the Trust Agreement
The trust agreement is the legal backbone of the arrangement and defines every role, responsibility, and instruction governing the property. An attorney-drafted agreement for a straightforward land trust generally runs $1,000 to $3,000. Online templates and DIY kits run from about $20 to a few hundred dollars. The template route saves money, but a poorly drafted agreement can create far more expensive problems later.
At minimum, the grantor and trustee sign the agreement. Notarization is generally required for the agreement to have legal effect, especially because it will be tied to a recorded deed. Store the original in a secure place. The agreement itself is not recorded publicly, which is part of what keeps your name off the county records.
Record a New Deed Into the Trust
Signing the trust agreement doesn’t move your property. You have to prepare and record a new deed transferring ownership from yourself to the trustee, and the deed has to identify the trustee in that capacity, not as an individual. A typical format reads: “John Doe to Jane Smith, as Trustee of the Doe Family Land Trust, dated January 15, 2026.”
Record the new deed with the county recorder’s office where the property sits. Recording fees vary by jurisdiction and generally run from $10 to $100 per document, sometimes with per-page charges on top. Some jurisdictions also require a Preliminary Change of Ownership Report or a similar form at the same time. In most states, transferring property into a revocable trust where you remain the beneficiary does not trigger a property tax reassessment or a transfer tax, but confirm with your county assessor before you record. After recording, the original deed comes back to the designated party, usually the trustee or the attorney handling the transaction. Keep it with the trust agreement.
Notify Your Lender if You Have a Mortgage
Transferring a mortgaged property into a trust could theoretically trigger the due-on-sale clause that lets the lender demand full repayment. Federal law prevents that for most residential owners. The Garn-St. Germain Depository Institutions Act prohibits lenders from accelerating a mortgage when property is transferred into a living trust, as long as the borrower remains a beneficiary and continues to occupy the property.1Office of the Law Revision Counsel. 12 US Code 1701j-3 – Preemption of Due-on-Sale Prohibitions The protection applies to residential property with fewer than five dwelling units.
To stay within it, remain a beneficiary and don’t transfer occupancy rights to anyone else. Notifying your lender before or shortly after the transfer is still smart. Some lenders flag title changes internally, and a proactive call avoids demands for explanation later.
Update Your Homeowner’s Insurance
The deed now shows a different legal owner, and your policy needs to match. Contact your insurance carrier as soon as you record. The insurer will typically add the trust as a named insured through a policy endorsement. If you skip this and later file a claim, the mismatch between the policy’s named insured and the deed’s owner can create coverage disputes or payment delays. Some carriers also need to confirm that the individual beneficiaries are still covered for personal liability, since a policy naming only the trust may not clearly extend liability coverage to the people living in the home.
What Changes on Your Taxes
When you set up a land trust and remain the grantor and beneficiary, the IRS treats it as a grantor trust. The trust is essentially invisible for income tax purposes, and all income, deductions, and credits from the property flow through to your personal return.2Office of the Law Revision Counsel. 26 USC 671 – Trust Income, Deductions, and Credits Attributable to Grantors and Others as Substantial Owners Rental income still goes on Schedule E of your Form 1040 the way it did before.
For a trust treated as fully owned by one grantor, you may not need to file a separate Form 1041 at all. The IRS offers optional reporting methods that let the trustee report everything under the grantor’s Social Security number.3Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 If you’re not the sole grantor-beneficiary, or if income is allocated to multiple parties, the trust may need its own Employer Identification Number and a Form 1041.
Property taxes don’t change simply because you moved the property into a trust. The bill may come addressed to the trustee, but the assessed value and rate stay the same as long as the transfer doesn’t trigger reassessment. Most jurisdictions exempt transfers into a revocable trust controlled by the same owner.
What a Land Trust Will Not Do
A land trust does not protect your property from creditors or lawsuits. Because the trust is revocable and you keep control as the beneficiary, courts treat the property as though you still own it personally. If someone sues you and wins a judgment, they can reach the property inside the trust the same as property held in your own name. The privacy makes the property harder to discover, but the trust itself is not a legal shield. If asset protection is the goal, a land trust alone won’t get you there.
Whether Your State Recognizes Land Trusts
Only about six states have statutes specifically authorizing land trusts, with Illinois, Florida, Virginia, Indiana, Hawaii, and North Dakota the most commonly cited. That doesn’t mean you’re stuck elsewhere. In most other states, you can achieve the same result with a standard revocable grantor trust holding real estate; the mechanics and benefits are essentially the same, just without the “land trust” label. Arizona is a notable exception because state law requires disclosure of beneficial owners on the deed, which cancels the privacy advantage. If you’re outside a land trust state, work with a local attorney who knows trust law in your jurisdiction.