How Should Nominee Realty Trust be Changed when One Property is Deeded Out?
About 15 years ago, my Dad, my brother and I quitclaimed our share of four properties into a nominee trust in Massachusetts. My sister didn’t put her share into the trust. The four properties are adjacent to on another and are in Chapter 61A agricultural use for lower taxes. I would like to take one of the properties out of the trust and place it in my own name so that I can build on the property. All owners are in agreement. I’m concerned that taking a property out of the trust will trigger Chapter 61A, giving the state the right to make the first offer to purchase the property. We don’t want to sell any of the properties. Is there any way of getting around this? Also does the nominee trust need to be dissolved to take the property out and set it up again with the rest of the owners?
I have not worked with Chapter 61A, so I would recommend engaging an attorney who does such work regularly. I did look quickly at the statute, and it does look complicated. One issue has to do with the five-acre minimum acreage. If either your property or the remaining ones ended up being less than five acres, you might lose the tax benefits of Chapter 61A.
Fortunately, I do have a lot of experience with nominee trusts and can answer that question. They are a way of holding title to real estate, generally used in Massachusetts, which carries some attributes of a trust and some of an agency agreement. They can be excellent ways of holding property where there are a number of owners, their interests may differ, or they may change over time, all of which appear to be the case in your situation. The ownership interests do not need to be recorded at the registry of deeds, so they can be changed without recording new deeds. In addition, nominee realty trusts can be used to conceal the identities of the owners.
The trust does not need to be dissolved; it along with your sister can simply deed the property to you. However, I presume that you will no longer have an interest in the remaining properties in trust. So, at the same time your property is deeded to you, your father and brothers should change the schedule of beneficiaries for the nominee trust. Such schedules are often misplaced since they are not recorded at the registry of deeds, so this will also serve as a good opportunity for your family to make sure it has its hands on a current schedule of beneficiaries.