I have spent the last eight years building and stocking my full-time retreat. Our family has had a terrific timing putting this together. One thing has happened beyond our control. The area we are located in has grown substantially. Our population has increased substantially, and we have also been slotted to receive Syrian refugees. I have come to the realization that It is simply going to be too hard to depend on this location as my only retreat. So after due diligence and the help of Survival Realty [1], I have purchased a secondary retreat in a totally different region of the U.S. I decided on a property that was extremely remote and was already built. I really didn’t have the time or fortitude to start all over. It makes you really feel for those who must completely start over due to a disaster. After I found the property and we agreed on a price and set a date to close, I realized something that I totally overlooked on my first property, which was how to title the property correctly. This is extremely important and probably greatly overlooked by most people.
First of all, what is property title? Wikipedia defines property title as:
In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other. For real property, land registration and recording provide public notice of ownership information.
Why does it matter how you title your property? Traditionally, when you buy a piece of property, you have a closing. This is the sit down meeting where everyone attends, contracts are signed, and money is exchanged. Then this transaction gets recorded at the county level. For example, John and Jane Doe buy a farm; after the transaction is complete it gets recorded that John and Jane Doe purchased 45 acres at such and such address for a certain sum of money. Since it is recorded, it has now become public record. This is important for many reasons. This can be detrimental to John and Jane Doe. Think of all the work and time you have put in your property, the purchase, the improvements you have made only to have them taken away due to a variety of different reasons, which follow:
Lawsuits– This is probably the most common risk right now. Let’s say you are involved in a car crash or medical malpractice situation or any other litigation. When the person who is suing you goes to an attorney, the first thing the attorney does is pull your records from the state you reside. They are looking for any property you own, perhaps what you paid, maybe what you owe, and if you are worth suing. If you look like you have nothing, the chances you will get sued drop dramatically, The adage holds true that “you can’t squeeze blood out of a turnip”.
Taxes- As confusing as the tax code is and who is interpreting it or enforcing it at any given time, we are all in danger of having liens placed on our property. However, if they can’t find the property to place a lean on, you have partially neutralized this threat.
Nosiness- For lack of a better term, nosiness can be a problem, too. We live in an extremely transparent time. There are people who have tons of time on their hands and Internet access to dig into people’s personal affairs. If someone has the slightest inkling you are a survivalist, they might be able to pinpoint your retreat and either show up uninvited WTSHTF, or even beat you there, or tell someone your weaknesses. Either way, wouldn’t it be nice to not have to worry about these things?
Nelson Rockefeller summed it up best: “The secret to success is to own nothing but control everything.”
So now that I have your attention on why this is important, what is the solution? In a sense how do you own property but not let the world know it? After looking at several possibilities I have found that the best option for me is the LLC, or Limited Liability Corporation. An LLC allows the corporation to own the property, however you own the LLC. When someone searches the property, it shows up under the corporate name rather than yours. The only person that will show up is the registered agent, and this is who you appoint, generally the attorney or accountant who set up the LLC. Anonymity is not the only thing the LLC offers. They also provide the members of the LLC protection from the liability that can arise from owning property, hence the name. That is why LLC’s are so popular for owning rental property and can also provide another level of security. When people see that a corporation owns a farm, they will assume that it is a money-making venture and not a “tin foil hat wearing doomsday” homestead. A couple of additional things I would like to point out for survival retreat scenario if you choose to use an LLC include:
- Place only one property under one LLC name, I know this sounds ridiculous but let me an offer an example of why you should do this. Let’s say you own a couple pieces of real estate and decide to put them under one LLC. You need a roof repaired and the person doing the repairs gets hurt and sues you. Under this circumstance all properties titled under the LLC are vulnerable to this lawsuit.
- Where you file the LLC can add another layer of anonymity. You don’t have to the file the LLC in the state where the property is located or where you reside. I would actually advise you not to, since corporations are filed at the state level and very few records are shared state to state. I understand that New Mexico LLC’s provide the most privacy, so this is the one I would recommend.
- It also is imperative you pay all your taxes and utilities out of the LLC checking account, or if you don’t want to open a checking account under the corporate name, pay everything with money orders. Do not get lazy and pay out of your personal account. Make it as hard as possible to track it back to you.
- Also, do not name the LLC with your name in it. This is a very common mistake. Be creative and have fun with it. Schumer Independence Foundation LLC perhaps.
In closing, here are a couple of things I would like to add. An LLC option is what was best for my situation. Some people would recommend a land trust. Land trusts, like LLCs, have many benefits, more so in the anonymity department, but they have many draw backs as well. In fact some states do not allow land trusts, so do your homework. In some states, the homesteading laws are so broad you may not have to do anything to protect yourself, except simply having the property titled in your name. Talk to your accountant and attorney about different options. Title companies are also a great resource, as they are very familiar with state laws. They can probably put you in touch with an attorney who is very fluent in these manners. You can have an attorney or accountant file the corporation for you. There are also a number of Internet websites who can do this for you. It generally runs around $350.
The point of this article is to get you thinking about an item that had slipped by my preparedness list. Even if you already own your retreat, it is not too late to change the titling of your property. In some states, it costs a little more to do an LLC over a land trust after you already own the property, due to the collection of tax stamps.
It is also very easy to say to yourself, none of this stuff matters if something big happens. It won’t matter how my property is titled when the lights go out. At this point in time, the lights are on and there is a danger lurking outside the walls of your retreat. The plundering horde you should be most concerned about right now is either a group of lawyers or the tax man. They come armed with pens and papers that are just as dangerous to your liberty as a band of thieves with rifles. Consider the LLC as a shield or armor to prevent these thieves from taking what is rightfully yours. I think it should be noted that when a business incorporates as an LLC, it is considered hiding behind a corporate shield. The irony wasn’t lost on me.
How you title your property is similar to the reason we buy insurance for our house. We aren’t buying the insurance thinking our house will burn. We buy insurance in case our house does burn. So consider carefully how you title your property. It might be the most important thing you ever do to keep your retreat safe.