PERSONAL PROPERTY TRUSTS

     In this world with unlimited access to information, the creation of trusts for privacy and asset protection has become commonplace. Land trusts can make it more difficult for creditors to locate your real estate, but, how do you shield notes, mortgages, deeds of trust, leases and options that may appear on public record? And how do you prevent access to information on your cars, boats, mobile homes and other items that are registered and recorded in public records?

     The "Personal Property Trust" agreement may be the answer. It is very similar to a land trust in that the title is held in the name of a trustee who is essentially a nominee title-holder acting at your direction. Like the land trust, the personal property trust is a revocable trust and the same rules for tax reporting apply. Titling your personal property in the trust does not trigger any gift tax or income tax consequences. And, you still retain full control of your trustee, so no trust tax return is required to be filed annually.

     The main reason to use the personal property trust is basically the same as for implementing a living revocable trust and land trust, to maintain secrecy or anonymity by keeping your name off the public records. Certain documents that are generally recorded but could be instead titled in the name of a trustee of a personal property trust. Essentially, any asset that is recorded in public records can he held in the name of a trustee, nominee-type trust.

FINANCIAL OBLIGATIONS

     One of the most practical uses of a trust is for holding title to financial obligations such as a mortgages or deeds of trust. If you hold a mortgage, which is an asset, like any other, it can be found by searching the public records. Each mortgage can be held in a separate trust which will help you keep a low profile. You could record mortgages against your own properties, known as "friendly liens," in the name of a trust to make it appear that your property is encumbered. Of course, to avoid charges of fraudulent documents, you should make sure that there is at least some consideration for the mortgage that you record.

VEHICLES

     The Department of Motor Vehicle records are often public information and anyone can search them to learn where you live. Holding your car, boat, plane or mobile home title in the name of a trust with a post office box or business address will help protect your privacy.

LIMITED LIABILITY COMPANY

     The names of the members of a limited liability company are listed in the state public records for everyone to see. You may want to form your limited liability company with a personal property trust as the member (you being the beneficiary of the trust).

TIERS OF PROTECTION

     You can combine a personal property trust with a land trust for even greater privacy. Since the beneficial interest in a land trust is considered to be personal property as opposed to real property, it can be held in the name of a personal property trust. Thus, you could form a self-settled personal property trust of which you would be the grantor and beneficiary. The personal property trust would then create a land trust with it named as the grantor and beneficiary. This "tier" effect may be appropriate in states which require the public disclosure of the grantor or in situations which a lender or title company insists on such disclosure in writing as a condition to making the loan or closing the purchase transaction.

     If you wish to shield information about your assets to maintain privacy and anonymity, consider creating that barrier by establishing a plan that includes a variety of property trusts. An experienced estate planning or asset protection attorney can assist you in implementing trusts necessary to shield your personal as well as real estate assets from public access.

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