Land Trusts: How to Mess Up Your Estate

I continue to be amazed at how messed up estates can get by using the combination of a land trust and a will.

I was in probate court at the Daley Center (Chicago) and witnessed this family debacle: The deceased had 6 adult children. In his will, he appointed his daughter as executor. The deceased put his house in a land trust and made 5 of his 6 kids beneficiaries of the land trust (The land trust avoids probate and is NOT part of the probate estate–but the personal property inside the house is part of the probate estate.)

The executor (who clearly has some control issues) put a padlock on the house (event though she was just one of 5 owners of the house, not THE owner.) Her brother, who was allegedly humming “You’re Not the Boss of Me” from Malcolm in the Middle, went to the house used a bolt cutter to lop off the padlock and let himself into the house. The executor-sister, horrified by her brother’s behavior, called the police who arrested her brother for trespassing. The probate judge signed an order telling the police the house was not part of the probate estate, so the brother could give it to his criminal attorney to get the case dismissed.

What a mess! This sort of thing reconfirms my belief that a revocable living trust (run by a back-up trustee who is fair and doesn’t lord it over the beneficiaries) is the best way to plan your estate. Land trusts, wills and heirs do not mix.

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