Trust Planning In Massachusetts: Nominee Realty Trusts

Do you own real estate? If so, it is important to consider the best strategy to handle it in your estate plan. In Massachusetts, nominee realty trusts are a unique tool often used for real estate ownership. Unlike traditional trusts, they act primarily as a title-holding vehicle. One potentially major advantage is that they keep the true owners’ identities private. At Fisher Law LLC, we have experience with Nominee Realty Trusts and other types of trust planning matters. Here, our Boston estate planning attorney provides a guide to nominee reality trusts in Massachusetts.

What is a Nominee Realty Trust in Massachusetts? 

Broadly explained, a Nominee Realty Trust (NRT) is a specialized legal arrangement used in Massachusetts to hold title to real estate. It is different from more traditional trusts. Most trusts are primarily designed to hold assets on behalf of a beneficiary. However, an NRT largely serves as a legal “vehicle” for the holding of title to real property. The trustee’s role is limited: they hold legal title but act only at the direction of the beneficiaries. In other words, the beneficiaries retain full control over the property. Why set it up? A NRT allows for:

• Full confidentiality over the ownership of property; and
• The simplified transfer of ownership interests to another party.

The confidentiality provisions can be especially useful for people and families who want to maintain their privacy. When property is recorded at the Registry of Deeds, only the trustee’s name appears. In other words, the beneficiaries of the trust will not have their name recorded in land registry records.

A Limitation with this Type of Trust: Very Limited Asset Protection 

Nominee Realty Trusts can be a very useful estate planning tool. With that being said, these are by no means the right solution for every situation. Although NRTs provide valuable benefits, they are not a complete solution for every estate plan. One big issue is that the trustee must act at the direction of the beneficiaries. As a direct consequence, this type of trust does not offer asset protection from creditors or lawsuits. Beyond that, tax treatment of the trust depends on the beneficiaries’ individual circumstances. For these reasons, NRTs are typically used alongside other estate planning tools, such as revocable trusts or irrevocable trusts, to build a comprehensive strategy.   Some individuals have used NRTs in the context of long-term care or nursing home planning and have had success in sheltering assets to qualifying for MassHealth.  See, Guilfoil v. Secretary of the Executive Office of Health and Human Services.   This is a recent case, and given the choice of types of trust to draft for MassHealth or Medicaid eligibility, a Medicaid Asset Protection Trust is more suitable for this type of planning.   A top-tier Boston estate planning lawyer can help you put the right structure in place for your legal and financial needs. 

Consult With Our Boston, MA Estate Planning Attorney Today

At Fisher Law LLC, our Boston estate planning lawyer has extensive experience with trust and tax planning. If you have any specific questions or concerns about nominee realty trusts, please do not hesitate to contact us today for a fully confidential initial consultation. It is our mission to help you and your family put the best estate plan in place for your specific situation. We provide estate planning services and trust planning services throughout all of the Greater Boston area.