What it is:
A land trust is a trust comprised exclusively of real estate assets.
How it works (Example):
A land trust holds one or more properties for the benefit of a designated group or organization (beneficiary). The trust is managed by a trustee or board of trustees responsible for overseeing the property or properties on behalf of the beneficiary. Land trust beneficiaries can be for-profit or not-for-profit organizations trying to privately accumulate property holdings for purposes such as expansion or conservation. For example, a community with endangered wildlife may have a land trust for pieces of land that qualify as wildlife sanctuaries.
Why it Matters:
The activities of a land trust, as with any manner of trust, are private in nature. For this reason, organizations acquire property by way of a land trust so not to effect a sudden change in the value of the property.