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