Why Owning Real Estate in Your Name May Be Your Biggest Risk

Written by:

Alejandra Rodriguez

Date:

28 May 2026

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Most real estate investors spend considerable time analyzing deals, managing cash flow, and building their portfolios. Far fewer give serious thought to how they hold title to the properties they own, and according to one investor who has been in the business since 1969, that oversight can be costly.

Randy Hughes, founder of Land Trusts Made Simple, has spent 26 years teaching real estate investors how to hold title through land trusts rather than in their personal names. His core argument is straightforward: owning property personally offers no meaningful benefits, only exposure. Investors still receive the same tax benefits regardless of whether the title is held in a trust, he says, but personal ownership opens the door to lawsuits, privacy violations, and estate complications.

The Problem With Your Name on the Deed

The risks of personal ownership are more immediate than many investors realize. Anyone can visit a county recorder’s office and look up what a person owns, what it’s assessed for, and what debt was placed on it at purchase. That information alone is enough to determine whether someone is worth suing.

Mr. Land Trust learned this lesson early in his own career, when he had around 15 properties titled in his name. “With those numbers, you can pretty much figure out whether I’m worth suing or not,” he says. “That’s when I started investigating ways to hold title other than my name personally.”

The exposure isn’t just financial. Mr. Land Trust recounts a story from a real estate mastermind event in Cancun, where a husband and wife with 15 Dallas rental properties described the moment a tenant traced the ownership back to their names and showed up at their front door at 9:30 on a Friday night, demanding a plumbing repair, and refusing to leave. The couple eventually had to call the police.

“Imagine if you had a six-year-old daughter and an eight-year-old son, and somebody threatens your family,” Mr. Land Trust says. “This is serious stuff.”

Land Trusts vs. LLCs: Understanding the Difference

A common assumption among investors is that forming an LLC provides sufficient protection. Mr. Land Trust pushes back on that, noting that most states publish the names of LLC owners, which eliminates anonymity unless the entity is formed in Wyoming, Nevada, or Delaware. More importantly, a single LLC holding multiple properties creates a single point of failure.

If an investor owns 10 properties titled in one LLC and a lawsuit is filed against just one property, a judgment against the LLC attaches to all of them. The investor can’t refinance or sell any of the properties until the judgment is resolved. His approach separates the two tools. Each property is placed in its own land trust, insulating it from the others. The trust is then owned by an LLC, combining the privacy benefits of the trust with the liability protection of the corporate structure.

“We link the trust with the LLC to get the best of both worlds,” he explains. Liability flows through the trust to the beneficiary, in most cases, an LLC, so that no single property can jeopardize the rest of the portfolio. He also cautions that single-member LLCs formed in states without charging order protection may offer less asset protection than investors assume. This detail often goes unexamined until it matters.

Three Purposes, One Structure

Mr. Land Trust frames land trusts around three core functions: privacy, asset protection, and estate planning.

On the estate planning side, the benefit is practical and often overlooked. When a property owner dies with real estate titled in their name, the assets must pass through probate, a public legal process that takes time and costs money. Property held in a land trust transfers directly to the successor beneficiary without any public filing or court involvement.

The privacy element also protects co-investors from each other’s problems. If two people purchase a property together and place their names on the deed, any legal or financial trouble affecting one partner, including an IRS lien, can attach to the property and affect the other. Mr. Land Trust points to a situation from his own investing history where a bank pursued a business partner for $3.2 million. Because the shared property was held in a trust rather than in both names, Mr. Land Trust was not affected.

Common Misconceptions and Attorney Confusion

One persistent obstacle to wider adoption is misinformation, sometimes from legal professionals themselves. Mr. Land Trust notes that land trusts receive little to no coverage in law school curricula, which leads some attorneys to incorrectly tell clients the structures are illegal in their state.

“No state has outlawed the use of these trusts,” he says. “Attorneys tend to claim things are illegal when they don’t have knowledge about them.”

Part of the confusion stems from conflating land trusts with living trusts, a more commonly known structure. The distinction is meaningful: a standard living trust is trustee-driven, with the trustee controlling decisions and beneficiaries having no active role. A land trust works in reverse: the beneficiary directs all decisions, and the trustee acts only on instruction.

Who Should Be Using These Structures

Mr. Land Trust makes the case broadly. In his view, any real estate asset, single-family homes, apartment buildings, commercial properties, air rights, mineral rights, options, and contracts, warrants a trust structure. The cost of setting one up through an attorney ranges from $1,000 to $2,500 per trust. His home study course, priced at $497, teaches investors to create them independently. Other attorneys and educators offer similar programs, but Mr. Land Trust argues that self-sufficiency is the practical approach for anyone managing an active portfolio.

“The smart real estate investor learns how to do it himself, and then he can feel confident in creating these trusts on every deal,” he says.

Shifting Awareness Among Investors

Investor attitudes toward asset protection have matured considerably over the past two decades. Mr. Land Trust, who speaks at roughly 24 to 30 events per year to audiences ranging from 25 to 500 people, observes that experienced investors now treat privacy and liability planning as foundational rather than optional.

“Very wealthy people, when they die, you never know what they owned,” he says. “That’s because it’s all transferred by trust. If the trust is a good vehicle for the wealthy, that’s a good vehicle for us too.”

The underlying message Mr. Land Trust returns to consistently is one of timing. Asset protection cannot be arranged reactively. Investors who wait until a lawsuit is filed, a lien is recorded, or a tenant shows up at their door have already lost the window to act.

“You can’t wait to buy fire insurance on your house when it’s on fire,” he says. “You’ve got to do your asset protection and your estate planning before you need it.”

For investors still holding properties in their personal names, that window remains open, but it requires a deliberate decision to act.

About the Expert: Randy Hughes is the founder of Land Trusts Made Simple, an educational organization focused on land trust structures for real estate investors. He has been investing in real estate since 1969 and has spent 26 years teaching investors how to hold title through land trusts.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.