How To Name A Trust

In this article, we’ll talk about how to name a trust. It’s an often overlooked—but important—part of setting up a trust.

Think of  trust as a set of directions for how to handle certain assets. You can control when, where, and to whom they’re distributed. A trustee, an individual or institution, typically handles the distribution of those assets to your beneficiaries.

We’ve gone over the benefits of setting up your rental property in land trusts in past articles. They help protect you from liability in a way that no LLC really can, but if you mess up the name, you could open yourself up to a host of other issues.

Why Do You Need to Know How to Name a Trust?

Why does the name of the trust matter at all? Couldn’t it be anything you want it to be, as long as the directives of the trust are carried out?

Knowing how to name a trust is important to real estate investors for a few reasons:

• In order to hold assets, a trust needs to be able to be identified. Without naming your trust, you don’t actually have a trust.
• A good trust name can better help banks properly process your loans and other required paperwork.
• The typical manner of naming a trust (“full legal name” + “Trust”) can cause you to unnecessarily sacrifice your privacy. Lazy advisors will often guide you in this direction. It’s even worse if you use your full address. The point of a trust is to protect your personal life, your privacy and belongings, from your business dealings. Why would you make it easier for bad actors to know exactly who you are and where you live?

Basic Guidelines for Naming a Trust

So, if you shouldn’t go with the typical way to name a trust (by naming it after your family name or address), what should you do, instead?

Get Creative (But Not Too Creative)

Come up with a list of creative trust names. We recommend that you name your land trust to sound like a fictional company. The only exception, though, is that you typically aren’t allowed to make your trust sound like a lender or other financial institution. You also need to avoid naming your trust after anyone else’s existing LLC.

But it’s important that you don’t get too creative, because you still want banks to be able to correctly categorize your trust based on its name alone. Some attorneys have even talked about clients naming their trusts after their dogs. You want to walk the line between clarity and anonymity.

Try To Keep It On The Shorter Side

When you name a trust, that name will be included when you name any asset in the trust. You can probably imagine how this could quickly spiral out of control if you choose a trust name that’s too long.

Pretend You’re a Celebrity

Celebrities work closely with attorneys to find ways that they can protect their anonymity from the public. This is a good idea for you, too. Land trust rental property should be used to shield you from possible litigation. As we mentioned in that article, no one wants to sue a ghost. The more obstacles you can set up, the more illusive you can be, the better.

Don’t Overthink It

At the end of the day, the best way to choose a trust name is to make sure that it protects your anonymity. If you’re having trouble coming up with a name that both suggests what the trust was set up to do and one that protects your anonymity, either consult with a professional or ask yourself which value is most important to you.

Most of the time, people would prefer to protect their privacy. Having documents clear through banks faster is simply a perk, and not something that you’re necessarily focused on when you’re setting up a trust. Liability and privacy, on the other hand? Those are essential.

Conclusion: How to Name a Trust

What are the main points you need to know before naming a trust?

• Try to stay away from the typical. Most advisors, out of nothing but pure laziness, will tell you to name your trust after your last name or address. The whole point of a trust is to shield you and your family from possible litigation. The easier you make it for people to pursue litigation, the more likely it is to happen. Don’t make the mistake of naming your trust in this manner. Come up with something creative instead.
• And, with that said, you still want banks to be able to clearly identify what the trust is for in order to clear paperwork as quickly as possible. So, you want to be creative but not too creative. However, this isn’t a hard-and-fast rule. It’s better to stay on the safe side and keep your privacy.
• Make it shorter. Every asset in your trust is going to start with the name of that trust. If it’s seven words long and you put multiple assets under that trust, it’s that much harder to differentiate which asset is which.
• If you’re still lost, you have two options: consult with a professional ... or just pick something unique.