Hawaii Real Estate State Practice Exam

A benefit of placing real property in a land trust is that it prevents partitioning. Is this statement true or false?

1. True

2. False

The correct answer is: True

The statement is true because one of the primary benefits of placing real property in a land trust is to prevent partitioning. When property is held in a land trust, the legal title is transferred to the trustee, while the beneficiaries maintain control and enjoy the benefits of the property without public disclosure of their identities. This arrangement can effectively shield the property from partition actions that might arise if multiple owners were to hold the property jointly. Partitioning refers to the legal process of dividing co-owned property to allow each owner to take possession of their share, which can often be contentious and disruptive. By utilizing a land trust, owners can avoid these complications, ensuring that their interests are maintained and minimizing potential disputes among co-owners. This makes land trusts an appealing option for individuals looking to manage shared properties while retaining privacy and control.