Ask a Lawyer - Archive

A relative has passed away, family now finding out she sold property to a care giver for $10 using a quit claim deed but property is involved in a land trust from the 1998...does the land trust over ride the quit claim deed?

A land trust is an arrangement whereby both legal and equitable title to land is held by a trustee (usually, a bank or trust company) and the interest of the beneficiary is personal property. [765 ILCS 430/1] A land trust consists of a deed in trust and a land trust agreement. The land trust agreement explains the rights and responsibilities of the land trustee and beneficiary. The beneficiary or any person designated in writing by the beneficiary has the power to direct the land trustee regarding the title, management, mortgaging and other ownership rights of the land. [765 ILCS 430/1] This person or persons is also referred to as a holder of the power of direction. The beneficiary is also entitled to collect rent, make improvements, and receive the proceeds of the sale of the land. [765 ILCS 430/1]

In Illinois, residential property subject to a land trust can not be sold under an installment contract unless the name of the land trustee, designation of the trust, and all of the beneficiaries of the trust are disclosed to the purchaser. [765 ILCS 430/2] Under this statute, an installment contract is defined as a contract where the purchase price is paid in installments over a period in excess of 5 years and title is given to the purchaser upon his payment of the entire purchase price or a portion as specified in the contract. [765 ILCS 430/1] The land trust beneficiaries that have the power of direction must also sign the contract. Any violation of the statute causes the installment contract to be voidable at the election of the purchaser. (765 ILCS 430/2]

The situation that you described does not involve an installment contract for the sale of this land. Thus, the above-referenced statute would not apply. However, on the assumption that the title to the land was in the land trust, only the land trustee could convey that title. We suggest that you contact this firm or another firm similarly expert in real estate and land trust law in order to have the land trust instrument reviewed.