How To Use a Nominee Trustee - YouTube

Hi, Clint Coons here with Anderson Business Advisors.

In this session, we're going to discuss how do you use a nominee trustee?

Okay, if you've looked at the video on using or choosing your trustee, I discussed the

benefits of using a nominee trustee, that is someone other than you to provide anonymity.

A lot of people take advantage of that admitting the fact that they use someone other than

themselves as their trustee.

Now, if they don't use a professional or someone who truly understands land trust, they find

out later on when they want to do something with the property, they have problems.

Think of it this way, you have a property right now that's in your name.

Let's say, that property is in the name of Karen.

Then Karen wants to set up a trust and transfer title of that property to that trust with

a nominee trustee.

Karen deeds the property into Clint Coons trustee of 732 Trust.

If you watched the How to Name Your Trust video, you'll understand the proper way to

take title and how to name your trust.

For privacy purposes, I'm going with this.

Karen transfers her property into my name as trustee.

Now, if we've done it right, I'm going to resign.

Whenever you use a nominee trustee, you want them to resign their position after the deed

is signed.

Not recorded, you don't need to do that.

As soon as it's signed.

Once the client deeds the property in the name of the trustee, it means once they signed

the deed, I resign my position immediately at that point in time and I give them my resignation

letter.

Now when I resign, the trust document will state that Karen is the successor trustee.

In the trust document itself, it states that Clint Coons is the initial trustee, Karen

is the successor trustee, okay?

Straightforward but on title, it's always going to read Clint Coons.

That's how we get the anonymity.

Here is where the problems typically arise for people who don't understand this and how

it should work.

They get the resignation down just fine.

That is they resign their position, Karen takes over, she's the trustee of her trust,

everything is working just fine, she has anonymity.

Then all of a sudden she wants to do this, she wants to sell her property.

Or two, she wants to refi her property.

She walks into the bank and she tries to refi the property.

The bank looks at the trust and say, "Who is this Clint Coons guy?"

Or she tries to sell the property and escrow gets a copy, they pull a copy of the deed,

and they say, "We can't give you the money, we have to send the money to Clint Coons because

he's the one that's listed as trustee."

Karen pulls out the resignation of Clint and says, "But he resigned."

"We don't know that.

How do I know you just didn't make that up?" is what they would say to her.

All of the sudden now that your money from selling your property, it's going to someone

else or you're told you can't refi your property and take advantage of those low interest rates.

Now, you're on a quandary.

What do you do?

Well, you set it up right to begin with, you don't have these problems.

What you do is that when the trustee resigns, you want to get from that trustee a trustee's

deed.

This is very important that you receive a trustee's deed.

A trustee's deed is basically a deed that's prepared by your trustee, your nominee trustee,

appointing you as the new trustee of this trust, as a successor trustee who is now going

to step into my shoes and be the trustee.

I'm deeding any rights interest I have over to you as the trustee.

Therefore you can record that.

You don't record it right away because if you recorded it right away, then you're going

to blow the anonymity.

Because when you record that deed, what occurs on title, my name's white and Karen's name

is listed as the trustee.

Now, she can go in and handle the refi or she can sell the property and all the proceeds

will run to her because I'm no longer listed on the current deed as the trustee of this

trust.

That trustee's deed is very important.

If you don't have it, then you're going to run into some problems trying to clear a title

to get your name onto it as a trustee.

It may mean you have to go to court to do it.

Depending on your county, they have different procedures for changing the trustee out.

This is a key component whenever you're using a nominee trustee.

Something else to consider here.

Whenever you use a nominee trustee, before you go in and do anything with the property

from a financial standpoint, make sure that you've recorded this trustee deed or at least

contact it if you're using Anderson, you've contacted us to let us know what you're intending

to do, so we can make sure that title reads the right way for you so it doesn't create

issues.

More importantly, this is more along the issues of refi-ing the property.

Many times what's going to happen is you cannot refi the property in the name of the trust,

so we will then direct you to transfer, deed the property out into your name.

Karen would just put it right back into her name prior to applying for the refinance on

the property.

They don't even the see the trust, they see Karen listed as the individual owner when

they go in for the refi.

After that's done, then we can just reverse the transaction, put it back into the trust,

throw the nominee back on, you get the anonymity again, and we're back to where we were originally.

Hope that cleared up some issues for you.

My name is Clint Coons with Anderson Business Advisors.