How Do I Deal With Property In a Nominee Realty Trust in Florida?

 In Real Estate, Revocable Trusts
Nominee realty trust

Photo by Martin Zangerl on Unsplash

Question:

My mother established a nominee trust in 2005 when she was living at the time in Massachusetts. She placed my bother as the trustee. At the same time she established a revocable trustand the property in question was placed in the trust. That property is in Florida. The schedule of beneficiaries for the nominee trust lists the revocable trust as the beneficiary. I am the trustee of the revocable trust. My mother and brother have both passed away and I have no other siblings.

My question is the following: I am living in the property in Florida and was attempting to get a homestead exemption. The deed is in the nominee trust. Does the property pass through the trust or will I have to go through probate? My goal is to draw up a new deed listing the revocable trust as owner. Any help would be appreciated since lawyers in Florida are not familiar with nominee trusts.

Response:

Nominee realty trusts are very much particular to Massachusetts, though they are used less commonly today than in the past. Until relatively recently, Massachusetts law required that when property was transferred to trusts that the entire trust be recorded at the registry of deeds. Nominee trusts were a way around this requirement. The nominee realty trust that don’t say very much could be recorded with the underlying trust kept private. Massachusetts has since changed the law to permit trustees to simply record a certificate supplying some basic information about the trust, so now nominee realty trusts are no longer necessary.

But that history is irrelevant to you since you have this Massachusetts-unique arrangement for property in Florida. Under Massachusetts law, the property would already be treated as being in the revocable trust since it is the sole beneficiary of the nominee trust. But I can see how this would be confusing outside of Massachusetts.

To remedy the situation is probably a two-step process. First, you need to become trustee of nominee trust. While I’d have to see the nominee trust to be certain, as trustee of the revocable trust you probably have the power to name yourself as trustee of the nominee trust. Once you are the trustee of the nominee trust you will have the power to execute a new deed conveying the property out of the nominee trust to the revocable trust directly.

Unfortunately, this probably means that you need both Florida and Massachusetts attorneys to be involved, the Massachusetts attorney for the first step involving the nominee realty trust and the Florida attorney for the second step.

If you would like more information about nominee realty trusts, you can check out our primer about them here.

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