What is a Realty Trust
Understanding Realty Trusts in Estate PlanningA realty trust, also known as a nominee trust, is a document that can allow you to ensure the smooth transition of a home or other real property to your intended beneficiaries. It also allows you to maintain privacy around the ownership of the property, as the trust will be the owner of record on the registry of deeds.
Unlike an asset protection or irrevocable trust, you can serve as the trustee and the primary beneficiary of a realty trust. You can also revoke or terminate the trust at any time. Realty Trust BenefitsThe primary benefits are privacy and ease of transfer.
Regarding privacy, the trust will be the owner of record at the registry of deeds, and all that will be disclosed is the identity of the trustee. Regarding transfer, like any other trust, the asset will pass by the terms of the trust upon your death, without needing to go through probate. This means your heirs can take title immediately, and their inheritance of the property will not be a matter of public record. You also can specify something other than outright transfer in the trust. For example, if the property is a family property that you would like to stay within the family, you can designate a trustee to manage it for the benefit of your heirs instead of transferring it outright at your death. Limiting liability: a realty trust will not protect the asset from your creditors (see limitations of a realty trust, below). However, it can shield your other personal assets for liability for things that occur at the property, if you set it up properly and take care to enter all business dealings relating to the property as the trust, not as yourself individually. This is a common strategy for rental and investment properties, so only that property is at risk if something happens on the property. Realty Trust LimitationsA realty or nominee trust is a powerful yet simple method of ensuring smooth transfer of property. There are limitations, however, that you should be aware of when considering your estate plan as a whole.
Specifically, a realty trust will not take the assets in it out of the reach of your creditors. It also will not shelter those assets from estate taxes, or take them out of your ownership for purposes of MassHealth/Medicaid eligibility. Those goals can be achieved through the use of other means, including irrevocable trusts, but not through a realty trust. |
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Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna wrote a book on estate planning: The Road to Peace of Mind: What You Need to Know About Estate Planning. Jenna has helped many individuals and families with planning to protect their legacies and loved ones, and planning for the future and succession of their businesses.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and earned her LLM in estate planning from Western New England Scool of Law in 2016. She has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped many clients with planning for their legacies and their future, and navigating the probate process in Massachusetts after the death of a loved one.
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The role of a realty or nominee trust in your estate plan depends on your unique circumstances and objectives. If you're interested in exploring the benefits of trusts or need guidance on your estate planning journey, our experienced attorneys are here to assist you. Contact us today to learn more about how a realty trust might help you meet your needs and goals. You can start by using the button below to schedule a free information call, or simply give us a call at 781-784-2322.
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