Nominee Trust
What this document covers
A nominee trust is a legal arrangement where the trustee holds title to the trust property for the benefit of the beneficiaries. Unlike traditional trusts, where trustees have broad authority, in a nominee trust, trustees act under the direct instruction of the beneficiaries. This form is commonly used for holding real estate and offers specific tax advantages while maintaining a flexible relationship between the trustee and the beneficiaries. Importantly, a nominee trust does not exist if one individual serves as the settlor, trustee, and beneficiary simultaneously.
Key components of this form
- Declaration of Trust: Establishes the role of the trustee and the relationship with the beneficiaries.
- Schedule of Beneficial Interests: Lists current and potential beneficiaries along with their respective interests.
- Duties of Trustee: Outlines the responsibilities and limitations of the trustee's authority.
- Powers of the Trustee: Specifies actions the trustee can take when directed by the beneficiaries.
- Termination Clause: Details how and when the trust can be dissolved by beneficiaries.
- Provisions for Amendment: Explains how the trust can be modified or updated by beneficiaries.
Situations where this form applies
This form is useful when individuals want to establish a trust to hold real estate or other property while ensuring that the beneficiaries can control the trust's operations. Situations include estate planning, asset protection, or facilitating property management among multiple beneficiaries. A nominee trust is particularly advantageous when seeking tax benefits while maintaining privacy regarding property ownership.
Who this form is for
This form is designed for individuals or groups who:
- Are looking to manage a family estate or shared property.
- Require a flexible trust to minimize taxes and administrative burdens.
- Have multiple beneficiaries wanting to retain control over property decisions.
Steps to complete this form
- Identify the parties involved, including the trustee and beneficiaries.
- Specify the property that will be held in the trust.
- Execute the Schedule of Beneficial Interests by listing all current beneficiaries and their proportionate interests.
- Complete the termination clause by entering conditions under which the trust can be dissolved.
- Have the form signed by the trustee in the presence of a notary, where applicable.
Does this document require notarization?
This document requires notarization to meet legal standards. US Legal Forms provides secure online notarization powered by Notarize, allowing you to complete the process through a verified video call, available 24/7.
Avoid these common issues
- Failing to list all beneficiaries accurately in the Schedule of Beneficial Interests can lead to disputes.
- Not obtaining proper notarization if required, making the trust invalid.
- Overlooking amendments that should be recorded with the local registry after any changes.
Why complete this form online
- Convenient access: Downloadable forms are available anytime for your convenience.
- Editability: Quickly make changes as needed without complicated procedures.
- Legal reliability: Forms are drafted by licensed attorneys, ensuring compliance with legal standards.
Form popularity
FAQ
There are three main ways for a beneficiary to receive an inheritance from a trust: Outright distributions. Staggered distributions. Discretionary distributions.
Nominee realty trusts are a hybrid between true trusts and agency agreements where one or more individuals are appointed to act for others. Typically, the trustee or trustees of a nominee trust act on behalf of beneficiaries named in a separate document.
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.
Living trusts, Totten trusts, and nominee trusts are the main types of revocable trusts. They can be revoked, amended, or terminated by the trust grantor, the person who creates the trust, any time before his or her death.
As the grantor, you can sell properties in a revocable trust the same way you would sell any other property titled in your own name. You can take the property out of the trust and retitle it in your name, but that isn't necessary.
Trustee is the person who take care of the money payout based on your trust deed. Nominee is the person you nominate to claim the death payout from your life insurance. Beneficiary is the person who can use and enjoy the death payout from your life insurance.
