Real estate services

When it comes to protecting your real property, and transferring its ownership, sometimes special arrangements are required to help realize your long-term financial objectives. Whether you require a trustee arrangement or help facilitating a 1031 Exchange, we can help. For additional information and for our current fee schedule, contact us at 630-906-2000.


What is a Land Trust?

A Land Trust is a simple method for handling various kinds of real estate (single-family residences, apartment buildings, condominiums, commercial buildings, vacant land or farm land) located in the state of Illinois.

Under a Land Trust agreement, the beneficiary retains complete control and benefits of the real estate. Additional property may be added, or the Trust may be terminated altogether if so desired.

BENEFITS OF A LAND TRUST

A Land Trust provides the following advantages:

  • Avoid probate expense and delay
  • Succession of ownership
  • Use of the beneficial interest as collateral
  • Privacy of ownership
  • Disposing of part interest
  • Ease of transfer of ownership
  • Quit-claim transfer out of joint tenancy
  • Avoid liens upon your title

 

HOW YOU CAN CREATE A LAND TRUST

A Land Trust can be created with a minimum amount of time and effort by signing a simple Trust Agreement naming Old Second National Bank as Trustee. That agreement will provide that you, as owner of the beneficial interest, direct Old Second to hold title to the real estate on your behalf. You, as beneficiary, retain the right to the earnings, avails and proceeds of the property. You also retain the right to transfer full or partial ownership of, or to sell, the real estate. Sale is accomplished by providing to Trustee a signed Direction for Trustee’s Deed, together with a fully completed Trustee’s Deed.

The agreement also sets forth the name of the individual (be it yourself or another person) given the power to direct Trustee to sign subsequent documents such as deeds, mortgages, leases and other related documents affecting the trust property. Old Second, as Trustee, will deal with the property only upon written direction of the party who has that power.

Following the creation of the Trust Agreement you must cause the subject real estate to be titled in the name of Old Second, as Trustee; this is done by Warranty Deed in Trust. After the deed is prepared and signed by you, it must be recorded in the county in which the property is located. After recording, the original deed should then be forwarded to Old Second, as Trustee, for safekeeping.

Your attorney will be able to answer your legal questions and assist you in preparation of the Land Trust Agreement.

Additional information, including our current fee schedule, is available by contacting our Trust Services area at 630-906-2000.



What is a 1031 Exchange Account?

A 1031 Exchange Account allows an owner of investment or commercial real estate to defer paying taxes on real estate gains, provided the property is exchanged for "Like Kind" property rather than sold for cash. "Like Kind" is all property classified as realty under state law. Improved real estate may be exchanged for unimproved real estate, and city real estate may be exchanged for rural real estate. A personal residence does not qualify as "Like Kind" property.

Section 1031 of the Internal Revenue Code has definite parameters when using a 1031 Exchange Account and Old Second National Bank is a Qualified Intermediary pursuant to Reg. 1.1031(g)(4) enacted under Section 1031 of the Internal Revenue Code of 1986, as amended.

In order to satisfy the parameters of the Internal Revenue Code, the following provisions are required to be followed:

 

PRIOR TO TRANSFER OF THE RELINQUISHED PROPERTY

  • The Exchange Agreement must be executed and entered into by the Exchangor/Taxpayer and the Bank/Qualified Intermediary with the legal description attached to the Exchange Agreement as an Exhibit;
  • Your rights in the Relinquished Property Contract must be assigned to the Bank/Qualified Intermediary and the Exhibit attached to the Exchange Agreement must be used for this;
  • The attachment to the Exchange Agreement, assigning your rights in the Relinquished Property Contract, must be signed by you as Exchangor/Taxpayer (Assignment and Notice Sections), the Bank/Qualified Intermediary (Acceptance Section) and the Relinquished Property Purchaser (Consent Section);
  • This assignment of your rights in the Relinquished Property Contract must be hand delivered, mailed by first-class U.S. certified or registered mail return receipt requested, or telecopied to you as Exchangor/Taxpayer and to the Relinquished Property Purchaser. This notice of assignment is required by Regulation 1.1031(k)-1(g)(4)(v) of the Internal Revenue Code;
  • The originals of the executed copies of the Exchange Agreement, legal description of the Relinquished Property and the assignment of your rights in the Relinquished Property Contract must be returned to the Bank/Qualified Intermediary;
  • The exchange funds (proceeds from the sale of the Relinquished Property) and the Bank/Qualified Intermediary's fee must be forwarded to the Bank/Qualified Intermediary. The exchange funds will be deposited in the 1031 Exchange Account for the benefit of the Taxpayer/Exchangor and invested pursuant to the terms of the Exchange Agreement.

 

PRIOR TO 12:00 A.M. (MIDNIGHT) ON THE 45TH DAY AFTER THE CLOSING DATE ON THE RELINQUISHED PROPERTY

  • Taxpayer/Exchangor must identify one or more properties as the Replacement Property as provided in Regulation 1.1031(k)-1(c) of the Internal Revenue Code. Any identification must be made on the attached Exhibit to the Exchange Agreement and an original of this Exhibit must be returned to the Bank/Qualified Intermediary.

 

BEFORE THE TRANSFER OF THE REPLACEMENT PROPERTY

  • Your rights in the Replacement Property Contract must be assigned to the Bank/Qualified Intermediary and the attached Exhibit must be used for this;
  • The assignment of your rights in the Replacement Property Contract must be executed by you as Exchangor/Taxpayer (Assignment and Notice Sections), the Bank/qualified intermediary (Acceptance Section) and the Replacement Property Seller (Consent Section);
  • This assignment of your rights in the Replacement Property Contract must be hand delivered, mailed by first-class U.S. certified or registered mail return receipt requested, or telecopied to you as Exchangor/Taxpayer and the Replacement Property Seller. This notice of assignment is required by Regulation 1.1031(k)-1(g)(4) of the Internal Revenue Code;
  • An original of the assignment of your rights in the Replacement Property Contract must be returned to the Bank/Qualified Intermediary;
  • Prior to 12:00 a.m. (midnight) on the 180th day after the closing date on the Relinquished Property, the Taxpayer/Exchangor must have closed on the Replacement Property(ies) with all possible exchange funds having been allocated by the Qualified Intermediary pursuant to direction.
  • The fee for the Bank's administration of the exchange as a Qualified Intermediary may be paid separately from the exchange funds or can be debited from the exchange funds upon receipt by the Bank, as the Qualified Intermediary. The fee for a 1031 Exchange Account will be due whether all or only part of the exchange process takes place.

Additional information, including our current fee schedule, is available by contacting our Trust Services area at 630-906-2000.


Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by the bank; may lose value.