For international buyers, purchasing a home in the United States feels straightforward, until a service provider over-complicates matters. The moment trusts, LLCs, gifts or multigenerational planning enter the picture, what should be a routine transaction can quickly become rife with unnecessary roadblocks. Too often, the problem isn’t the law. It’s the title company tasked with executing it.

Trusts and LLCs have been used for decades by both domestic and international buyers to own personal residences. These legal structures help ring-fence assets from liability, preserve privacy, maintain homestead benefits, and allow property to pass efficiently to the designated beneficiaries. A secondary benefit is that they help avoid probate delays.

There is nothing novel, untoward or even questionable about the use of trusts or LLCs in these instances. Yet many real estate developers and title companies remain surprisingly uninformed, or professionally ignorant, about how these structures work, particularly when foreign buyers are involved.

That ignorance can cause unnecessary stress and delays.

Consider a recent South Florida transaction involving an international buyer from Central Asia. The home was to be owned through a properly structured trust, with an LLC beneath it holding title. This was an entirely conventional and legal arrangement designed to protect the buyer’s interests.

Instead, the title company, developer and their legal counsel insisted – incorrectly – that the trust’s beneficiary be named directly on the deed and on regulatory filings, including Financial Crimes Enforcement Network (FinCEN) forms. That single demand would have pierced the trust, defeated its legal purpose, and exposed the buyer to unnecessary tax and liability risk.

It was not legally required. Worse, it offered the title company no additional protection. This was not a grey area or a difference of opinion. Plain and simple, their request was wrong.

When pressed for justification, the response was consistently, “Because this is how we do it.” Declining to comply would have placed the buyer’s six-figure deposit at risk. Ultimately, the issue was resolved, but only after unnecessary delays, more than 60 emails, ownership diagrams, and the buyer’s repeated and steadfast refusal to sign documents that misrepresented the structure.

Unfortunately, this experience is not unique. Foreign and U.S. buyers alike rely on trusts to manage their estates in a tax-efficient manner, comply with religious or cultural restrictions, and protect assets. When title companies misunderstand or refuse to educate themselves on these realities, buyers may be forced into impossible choices: comply with incorrect demands or risk losing deals and deposits.

Many misunderstand two critical points: title companies are not neutral arbiters of the law, and they certainly are not estate planners. They also can be dogmatic, sometimes unwilling or unable to deviate from rigid internal processes, even when those processes are flawed.

If a title company cannot properly handle a basic trust structure, it raises a serious question: how would it manage something more complex, such as a 1031 exchange? This process allows real estate investors to defer capital gains and depreciation recapture taxes by swapping one investment property for another “like-kind” property. For the untrained or intransigent, a wrong step can lead to thousands of dollars in unnecessary taxes levied.

The lesson is simple. If you are buying real estate, especially as an international or multigenerational buyer, do not assume that those involved understand trusts simply because they work in real estate. Engage independent counsel early and review ownership structures carefully before signing anything.

When it comes to trusts, estates, and real estate, ignorance isn’t just inconvenient. It’s expensive, and sometimes irreversible. If you’re facing such situations and are in need of skilled counsel, contact me. I can provide confidential, trusted guidance to help ensure your real estate, or other transactions, are handled to your legal advantage.