What is the purpose of land trusts?

The purpose of land trusts is to hold title for the benefit of another. Land trusts are legal entities created to hold real property on behalf of an individual or group. The primary attraction of a land trust is that it allows for privacy and can simplify the management of real estate while separating legal ownership from beneficial ownership. This means that while the land trust holds the title to the property, the benefits of ownership—such as the right to use, benefit from, or sell the property—are enjoyed by the beneficiaries of the trust. This arrangement can be particularly advantageous for estate planning and protecting the assets from claims in certain situations.

Other options may touch on important aspects of property management or ownership, such as collective ownership or tax implications, but they do not specifically capture the role of a land trust in serving as a vehicle for holding property on behalf of another party, which is the core function of this legal structure.