A nominee trust is a trust in which the trustee holds legal title to the trust property for the trust's beneficiaries, but the beneficiaries exercise the controlling powers, and the actions that the trustees may take on their own are very limited. Such trusts are a common device for holding title to real estate, and afford certain tax advantages. A nominee trust is not a trust in the strict classical sense, because of the trustee-beneficiary relationship. Despite a nominee trust's nontraditional relationship between trustee and beneficiary, such a trust must still adhere to the rule that no trust exists when the same individual is the sole settlor, sole trustee, and sole beneficiary. The trustees of a nominee trust act at the direction of the beneficiaries.
Illinois Nominee Trust
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FAQ
Investors make their investment in the shares of the fundraising company via the Nominee, which holds the issued shares on their behalf. Funderbeam acts as the Nominee shareholder in the interest of the investors, who are the beneficial owners of the investment.
A nominee trust is typically established to hold title to real estate and is disregarded for federal income tax purposes (i.e., a separate return, such as a 1041, is not required).
To get to your questions, you may have to get a tax identification number for the trust. This would not be for IRS purposes. Instead, the bank may well require such a number in order to open a bank account in the name of the nominee trust in order to collect rents and pay expenses.
The nominee trust is not a trust - it is an agency arrangement in which the "trustees" are agents for undisclosed principals. A true trust is an arrangement under which a "grantor" or "donor" transfers property to a trustee to use for the benefit of one or more beneficiaries.
A living trust might be especially useful in Illinois because the state does not use the Uniform Probate Code. This means that a living trust has the potential to save time and money for your family. When it comes to creating a living trust, you can do it yourself or work with an attorney.
A nominee trust is an example of a bare trust: this is a simple type of trust where the trustee acts as the legal owner of some property but is under no obligation to manage the trust fund other than as directed by the beneficiary, and where there are no restrictions beneficiary's right to use the property.
66.In this context a nominee is a person appointed by the trustees to hold trust property in his or her own name. Thus, a person may be registered as the owner of certain shares in a company but may in fact hold them as nominee for a trust.
A nominee trust is also an example of an agency arrangement, whereby the beneficiary acts as principal, and the nominee acts as agent. This agency relationship means the nominee has limited, or no, discretion as to how the trust property is managed.
