What action does Peter take to create the land trust for his real estate investments?

• A. He sells the properties to Tom
• B. He conveys the real estate to Tom
• C. He establishes a partnership with Tom
• D. He appoints Tom as a co-owner

Answer: (B)

Creating a land trust involves transferring the ownership of real estate into a trust structure where the trustee holds the title on behalf of the beneficiary. In this context, when Peter conveys the real estate to Tom, he is effectively transferring the properties into a trust setup where Tom becomes the trustee.

This transaction allows for added privacy, potentially shielding Peter's identity as the owner from public records while maintaining control over the assets through the trust arrangement. The beneficial interest can still remain with Peter, meaning he can manage and benefit from the property despite not being the public title holder.

The other actions listed, such as selling the properties or forming a partnership, do not achieve the intended legal structure and objectives of a land trust. By conveying the properties into a trust with Tom as the trustee, Peter successfully creates the land trust necessary for his real estate investment strategy, maintaining the advantages that come with such an arrangement.