If you are buying a home, do you have to put your individual name on the deed?
Not necessarily.
Most homebuyers purchase property in their individual names without giving the issue much thought. But for buyers concerned about privacy, personal security, or keeping their home address from being easily associated with their identity, how title will be held deserves consideration before closing.
In Maryland and Washington, DC, there are legitimate ways to own real estate without necessarily having the buyer’s individual name appear as the record owner on the face of the deed.
The important part is planning the ownership structure before settlement.
Why Does It Matter Whose Name Is on the Deed?
A deed isn’t simply another document in your closing package.
It is the legal instrument establishing ownership of the property, and after closing it is recorded in the public land records.
In Maryland, deeds are part of the state’s public land records.
That means buying a home can create a publicly accessible connection between an individual’s identity and a particular property.
For most buyers, that isn’t a concern.
For others, it can be.
A physician, attorney, business owner, executive, public figure, government employee, or someone who has experienced harassment may have legitimate reasons for not wanting a home address readily connected to his or her name.
Other buyers simply value privacy.
The question then becomes: Are there other ways to hold title?
Yes.
Can I Just Put Someone Else’s Name on the Deed?
This is generally not a good privacy strategy.
The person named as the owner on a deed holds legal title to the property. Putting a relative, friend, or other individual on the deed simply to keep your own name out of the land records can create significant problems involving ownership rights, creditors, divorce, death, taxes, financing, and estate planning.
If the objective is privacy, the better approach is generally to create a legitimate ownership structure designed for that purpose.
One potential option is a trust.
Buying a Home Through a Trust
Instead of an individual acquiring title directly, real estate can potentially be acquired and held by a trustee in a fiduciary capacity.
This distinction is important.
The trustee holds legal title, while the trust agreement establishes the rights and interests of the parties to the trust.
Depending upon how the transaction is structured, the recorded deed may therefore identify the trustee rather than the individual beneficial owner.
For buyers particularly concerned about this issue, I use the term real estate privacy trust to describe a trust intentionally structured to provide an additional layer of privacy concerning real estate ownership.
A privacy trust does not make the buyer legally invisible, nor does it permit someone to conceal assets from taxing authorities, courts, creditors, lenders, or anyone else legally entitled to the information.
It is about privacy, not secrecy.
But there can be a meaningful difference between information that is legally discoverable when necessary and information that appears immediately when someone searches public property records.
What If I Don’t Want My Name to Appear as Trustee Either?
This is where more specialized planning may be appropriate.
A buyer can create a trust and serve as trustee, but if the buyer’s objective is keeping his or her individual name off the public deed, that may accomplish little from a privacy standpoint.
Another option may be the use of an independent or institutional trustee.
In that structure, an independent trustee initially holds title in a fiduciary capacity. The private trust agreement identifies the parties’ rights and establishes how the trust will be administered.
The appropriate structure depends upon the client’s objectives, financing, property, lender requirements, and estate plan.
This is one reason privacy planning should begin before the closing documents are prepared.
What About an LLC?
An LLC is another structure commonly associated with real estate privacy.
For investment properties, an LLC may be entirely appropriate and may provide benefits beyond privacy, including liability separation.
But an LLC and a trust are not interchangeable.
An LLC is a business entity. A revocable trust is generally an estate-planning and fiduciary arrangement.
For someone buying a primary residence, LLC ownership can also raise issues involving residential mortgage financing, insurance, property-tax treatment, and other considerations.
For some investors, the best structure may involve both an LLC and a trust.
For an individual purchasing a home, a trust may be the more practical solution.
The structure should be selected based upon the transaction—not simply because someone read online that an “anonymous LLC” will hide ownership of a house.
Can You Really Own Real Estate Anonymously?
The word “anonymous” needs to be used carefully.
There is no magic legal structure that makes the true owner of real estate invisible to everyone.
Mortgage lenders must know their borrowers. Banks and title companies have legal and regulatory obligations. Government agencies may be entitled to ownership information. Courts can compel disclosure in appropriate circumstances.
A properly structured transaction should comply fully with those requirements.
The more realistic objective is enhanced privacy.
If an independent trustee is the record title holder, for example, someone casually searching the land records may not see the beneficial owner’s individual name on the face of the deed.
That may be exactly the level of privacy a client is seeking.
Can I Get a Mortgage and Still Buy Through a Trust?
Possibly, but this is one of the most important reasons to plan early.
A buyer should never create a trust ownership structure and simply assume that the mortgage lender will accept it.
The proposed ownership must be coordinated with the lender.
Depending upon the transaction, a lender may permit the property to be acquired through a trust if the borrower maintains the required beneficial interest and the trust satisfies the lender’s underwriting requirements.
Other lenders may impose additional conditions or require a different structure.
If a buyer tells the attorney about the privacy concern several weeks before closing, there is time to address these issues.
If the buyer raises it the day before settlement, the available options may be considerably more limited.
What About Title Insurance and the Settlement Company?
The title and settlement company also needs to know how the buyer intends to take title.
The deed must properly identify the grantee, and the title insurer needs to be comfortable insuring the ownership structure.
If a trustee will take title, the settlement company may request trust documentation or a Certification of Trust establishing the trustee’s authority.
Maryland law specifically recognizes the use of a Certification of Trust, which can provide information about the trust and trustee’s authority without necessarily disclosing all of the trust’s dispositive terms.
That can be particularly useful when privacy is one of the client’s objectives.
What If I Already Bought the House in My Name?
It may not be too late to restructure ownership.
An existing owner may be able to transfer property into a trust by recording a new deed.
I have previously discussed the process of transferring Maryland real estate into a trust.
However, changing ownership after closing can create additional questions. These may involve mortgage restrictions, transfer and recordation taxes, title insurance, property taxes, condominium or homeowners association requirements, and existing liens.
There is another limitation: changing title now cannot erase an owner’s name from a previously recorded deed.
For a buyer primarily concerned about privacy, getting the ownership structure right at the initial purchase is preferable whenever possible.
Realtors: Ask the Privacy Question Early
Real estate agents don’t need to design trusts or determine the appropriate legal ownership structure.
They can, however, identify the issue early.
A buyer may mention privacy, security, keeping a home address confidential, purchasing through a trust, or avoiding an individual name in the public property records. Any of those concerns may justify a conversation with an attorney well before settlement.
Sometimes the buyer will simply say:
“I don’t want my name on the deed.”
That seemingly simple request can involve estate planning, real estate law, mortgage requirements, title insurance, and tax considerations.
Identifying the concern early gives the buyer, Realtor, lender, title company, and attorney more flexibility.
Privacy Planning Should Happen Before Closing
Buyers spend considerable time thinking about the property, mortgage rate, inspection, closing costs, and moving date.
Far fewer think about what their deed will say.
For privacy-conscious buyers, that conversation should happen early.
A trust, independent trustee, LLC, or another legitimate ownership structure may provide greater privacy. The right solution depends on the property, financing, estate-planning objectives, lender requirements, and title-insurance requirements.
If keeping your name off the deed matters to you, don’t wait until settlement to ask about it.
Buying Real Estate in Maryland or Washington, DC?
Gentile Property Law Office, LLC assists buyers and property owners with privacy trusts, revocable trusts, deeds, real estate ownership structures, title planning, and estate planning in Maryland and Washington, DC.
If you are planning a purchase and want to explore ways to keep your individual name off the public deed, address the issue before closing.
This article provides general information and does not constitute legal advice. The appropriate ownership structure depends upon the facts of each transaction.
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