How To Use a Nominee Trustee

A nominee trustee is one of the most important aspects of land trust because it keeps your ownership of real estate private; however, it is also the least understood and often results in title problems or real estate snafus. A nominee trustee is someone who is selected to serve as your land trustee for the limited purpose of transferring title out of your name and into the name of your trust. For example, Alan Rench owns real estate located at 53rd Cherry Street. Alan, seeking anonymity for his property, would like title to be transferred out of his name. Alan establishes the 53 Cherry Trust with Clint Coons as trustee. Alan then deeds his property to his trust as follows: Clint Coons, Trustee of the 53 Cherry Trust. Alan is no longer recognized as the owner of the property because title is held in Clints name on behalf of the 53 Cherry Trust. After the property is transferred into the land trust, Clint will resign his position and Alan will become the new, but undisclosed trustee, of the 53 Cherry Trust. When adopting this strategy here are some concerns: What happens if Clint does not resign If your land trust nominee trustee does not resign then as the beneficiary, Alan has the power to remove him thus, this is not a real concern. When Clint does resign how does Alan take control When Clint resigns, it is important he provides Alan with a Trustee Deed. This type of deed, transfers title from his name to Alan as trustee of the land trust. This deed is not recorded until Alan desires to be named on title, e.g., Alan plans to refinance or sell the property. What happens if Clint is sued This can be an issue because Clints creditor might lien all properties title under Clints name. The property in 53 Cherry Trust would be something an attorney will hit. To minimize this risk always use a professional or trust company to serve as your nominee trustee. These individuals have a license to protect and take steps necessary to reduce this risk.