Achieving Anonymity with a Nominee Trustee
In this episode of Coffee with Carl, attorney Carl Zoellner explains what it means to use a nominee trustee and how this can add a layer of anonymity to your investing.
When it comes to utilizing a nominee trustee, the most common reason for doing so is for anonymity purposes. In most cases, using a nominee trustee removes one’s personal name from title. This adds a layer of anonymity to your assets.
Most commonly, nominee trustees are utilized with land trusts, which are grantor trusts used to hold title to property. There are a couple of different options for who you choose as your nominee trustee.
First, you could ask a friend or family member (someone who isn’t you) to be the nominee trustee. Second, you could hire an attorney to be the nominee trustee. Third, you could use a qualified trust company as your nominee. Finally, you could even create an entity to serve as the nominee trustee of your land trust.
Using a nominee trustee is a legal way to remove your individual name from title and instead list the nominee trustee’s name. The nominee trustee does not have to be registered as a trust company unless there’s some sort of profit motive or the company is charging you. If you utilize your own entity as nominee trustee, you’d want to set it up in a business-friendly state.
For instance, let’s say I title my property at 123 Main Street into my land trust, which I also name the 123 Main Street trust. Without a nominee trustee, this would read as: Carl Zoellner, trustee of the 123 Main Street trust. When I use a nominee (for instance, let’s use Clint Coons in this example since he’s one of the founding partners), it would read as: Clint Coons as trustee of 123 Main Street trust. By adding in that nominee or separate party, I completely remove my name from title. It disappears.
Let’s say that instead, I use an entity — which I named 123 Main Street, LLC — to serve as my nominee trustee. Now, this will read as 123 Main Street, LLC as trustee of 123 Main Street trust. When you begin to title your properties into a land trust with this kind of layered ownership, you’re likely to evoke confusion among potential plaintiffs’ attorneys trying to figure out who actually owns the property.
I receive a lot of questions from clients about who would be the best nominee trustee for their land trusts. My suggestion would be to use an LLC, but if you’re going to use an individual, make sure they sign a trustee’s deed. This will provide some protection in the event that the individual moves away, passes away, or otherwise becomes inaccessible.
That’s why, in part, I suggest using an LLC to serve as nominee trustee of your land trust. This will still accomplish the goal of removing your personal name from title while allowing you the flexibility to retain control over the LLC.
If you’d like to discuss the best entity structure to use in conjunction with your land trust, or if you have questions about this or any other entity strategy, schedule a complimentary Structure Consult now. On the call, you and a Senior Advisor will build out the best custom entity structure for your individual situation. You’ll walk away with a blueprint and the peace of mind that you know how to set things up the right way. You can schedule online or by calling 888.871.8535.
Watch as Carl explains how to utilize a nominee trustee with your land trust to remove your name from title and provide a layer of anonymity to your ownership.
Resources mentioned in this video:
- Schedule a complimentary Structure Consult now
- Register for the next Tax & Asset Protection Online Event
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