Big Mess In Chicago With A Land Trust

Several months ago a lady from Chicago called my office and wanted to talk about a big mess she was in with her mother?s property. In 1993 her mother and step-father formed a land trust to hold title to their residence in a Chicago suburb. They made the lady and her step-brother (who she has never met personally) successor beneficiaries.

In 2002 the husband/step-father died and the mother hired a lawyer to create a Revocable Living Trust (RLT). The lawyer moved all assets over to the RLT, but failed to deed the property out of the land trust and into the RLT (which is not what I would recommend doing but that was his plan nonetheless). The sole successor beneficiary to the RLT was the daughter (are you getting the feeling that the step-son was soon to be cut out of his inheritance?)

The problems began when the mother died and the step-siblings discovered that since the attorney did not transfer the property out of the land trust and into the RLT, the step-son WAS still entitled to half of the property (still held in the original 1993 land trust) as co-successor beneficiary to the primary beneficiaries.

The estimated equity in the property in question was $250,000 (even after the housing decline) and the daughter wanted it all! What did she do? Well sure, she sued the attorney for failing to complete the transaction for her mother. When the daughter called me she had already spent $80,000 in legal fees suing the attorney.

Source: http://www.reiclub.com/realestateblog/big-mess-in-chicago-with-a-land-trust/

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