By Libby Banks, the Law Office of Libby Banks, PLLC
The news is often filled with stories about fraud. One of the areas of current concern I often hear about is title theft. What is title theft? It can range from someone fraudulently refinancing your home and pocketing the money, accessing the equity with a home equity line of credit, forging a deed, and selling your property to an unsuspecting buyer, or providing fake wiring instructions so the payment for your new home goes to a fake title company.
How can we protect against this type of title fraud? Recently the Maricopa County Recorder has set up a program to alert you if a document is being recorded that might affect your title. You can sign up to be notified by email with Title Alert. You can sign up to get an alert regarding your name (it is not specific to your property) at https://recorder.maricopa.gov/MaricopaTitleAlert/. I highly recommend this to keep on top of what might be happening with your title. Pinal County has a similar alert, but our other counties have not yet put in place an alert system.
So, what about a house held in trust? Could having your house in a trust help prevent fraud? Likewise, is a rental property in an LLC better protected from title fraud than one held by an individual?
For most fraudsters, the easier it is to defraud you, the better for them. The more complications in their way, the harder it is to defraud you, and the greater the risk of getting caught.
When you title your home to your trust there are many additional complications. It takes a high level of sophistication to commit fraud regarding that property.
When the title is in an individual’s name, the criminal only needs to sign the name to forge a deed or loan document. If the home is in a trust, they must provide proof that the trustee has the authority to take out the loan or transfer the property. Sometimes the title company or lender will ask for the entire trust document. Faced with these additional requirements, a fraudster would quickly decide to pursue a home offering fewer difficulties and move on.
Likewise, a fraudster stealing or financing a property in an LLC must again show that they are authorized to act. The lender should be checking the State records to determine who owns the LLC, who is the manager, and asking for documents showing the authority of each person to act. The criminal is likely to move on if you have an LLC as a stumbling block.
If you’ve been thinking about putting a trust in place, the possibility that it may help prevent fraud is one more reason to move forward.
For our free initial consultation, call us at 602-375-6752 or visit our website www.libbybanks.com.