In Illinois, a land trust is commonly used to:
Question & Answer
Review the question and all answer choices
Avoid all property taxes
A is incorrect because land trusts do not avoid property taxes. Tax authorities can still assess and collect property taxes, and using a land trust solely for tax avoidance would be considered tax evasion, which is illegal.
Provide privacy of ownership
Eliminate title insurance requirements
C is incorrect because title insurance requirements remain unchanged with land trusts. Lenders and buyers still need title protection, and title companies will insure the property regardless of whether it's held in a trust.
Bypass zoning regulations
D is incorrect because zoning regulations apply to property use, not ownership structure. Land trusts do not provide any exemption from local zoning laws, building codes, or land use regulations.
Why is this correct?
B is correct because Illinois land trusts provide privacy by separating legal title (held by trustee) from beneficial ownership (beneficiary). This arrangement prevents the beneficiary's name from appearing in public records, offering anonymity while maintaining full property rights.
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