Trust Names Rarely Disguise Identity

One of the most common questions clients ask is whether they should disguise the name of their trust to protect their identity or keep secret that they own the home. The idea of naming your trust something obscure — like "The Disguised Entity Trust" — might seem like a simple way to maintain privacy. However, achieving true anonymity in property ownership is far more complex than just choosing a creative trust name.

Why Disguising a Trust Name Alone Doesn't Guarantee Privacy

For most property owners, disguising a trust name doesn't offer meaningful privacy. Here's why:

1. Mortgage Records and the Grantor-Grantee Index: If you own property with a mortgage, your name will already appear on public records such as mortgage documents and the Grantor-Grantee Index. This means that no matter what you name your trust, your identity is still linked to the property.
2. Financial Accounts: Any financial accounts associated with your trust — like bank or brokerage accounts — will already have your name on them. Renaming your trust won't change this visibility.

When Disguising a Trust Name Can Work

While it's challenging to achieve privacy in most cases, there are scenarios where disguising a trust name may be effective:

Owning Property Without a Mortgage

If you inherit a home or purchase property outright with cash, your name won't appear on mortgage documents. In this case, titling the property under a disguised trust name can help maintain privacy. However, there are extra steps involved:

• You'll need a trustee to sign title transfer documents on behalf of the trust
• Once the transaction is complete, the trustee can resign and return authority over your home to you
• For any future transactions, your successor trustee would need to handle the documents to ensure your name doesn't appear on public records

Using an LLC for Property Ownership

An alternative — and often more straightforward — option for disguising property ownership is to title the property under an LLC (Limited Liability Company). LLC ownership offers a few distinct advantages:

1. Grantor-Grantee Index Privacy: Unlike trusts, the LLC's name appears on the Grantor-Grantee Index instead of your personal name
2. Added Flexibility: LLCs provide a layer of separation between you and the property, offering both privacy and asset protection

However, there are costs and considerations:

• California Franchise Tax: You'll need to pay an annual $800 minimum franchise tax fee for the LLC. This can make LLC ownership an expensive option for those trying to disguise their primary residence.
• Property Tax Reassessment More Likely: For your primary residence, there are circumstances where on the passing of the parents there would not be a property tax reassessment when the next generation inherits (generally, if it is your primary residence and then becomes your child's primary residence). You would usually forego those significant savings if the property is owned in an LLC.

Final Thoughts

Disguising a trust name may sound like a simple solution, but in practice, it's difficult to achieve full anonymity without additional strategies. If privacy is your primary goal:

• This will need to be a new purchase for cash
• Consider an LLC
• If using a disguised trust name, be prepared for additional administrative work, especially as a trustee needs to manage transactions to keep your name off public records

Ultimately, while it is possible to maintain some level of privacy, it often requires careful planning, additional costs, and an understanding of the trade-offs involved.