The personal property trust is available for those wanting to keep their belongings but no longer in their name. Why, you may ask, would anyone want to do that? What are the specifications of such a trust? We'll learn all of that and so much more down below. Note, they are similar to land trusts in many ways. Let's go!
Why Would Anyone Have a Personal Property Trust?
There are hundreds of reasons, but the primary ones fall to a wish for anonymity. People don't want their car or their jewelry to be on file under their name. Sometimes this is because of impending legal issues and sometimes it's just because they don't want to encourage anyone to bother them. Celebrities and those with a public-facing image often operate through trusts so individuals won't find their license plate or a personal boat and stalk them.
Other instances may include simply not wanting to be associated publicly with the business. Perhaps someone has invested in an adult bookstore and, while incredibly legal and worth every penny, they also deal closely with children in a daycare business. This double investment would upset some parents. It is better to retain anonymity.
How Can I Help?
If you decide to become a trustee, you (or your company) stand between the trust owner and the general public. LLCs are a common venue for protecting the anonymity of the general population that wishes not to have certain things registered in their name.
However, you need not own an LLC. They are simply a common way to perform this task. Indeed, you can stand in, your company can stand in, and any other number of methods and manners can be used to accomplish this task.
What Is My Role as a Trustee?
Unless there are other items mentioned in your contract/trust (we'll get to that in a moment), you simply need to exist. You should be able to be contacted if there is an emergency or a death regarding the trust, but that's it. Piece of cake, right?
Not so much. If a legal hearing occurs, you may be tracked down by the media for your opinion since you are the publicly registered person associated with the vehicle or whatever the personal property is.
For instance, if your celebrity friend has you in a trust relationship with his car and he accidentally hits someone, you are likely to be interviewed (and possibly harassed) by the local media. They will find your connection to the trust situation and they will be hungry for information. And it's likely that your trust will be written in such a way that it is impossible for you to inform them of anything to do with the situation, too.
Should I Look Out for Anything in the Contract?
Never, ever accept responsibility for something that is not yours. Your sole purpose involved in this trust should be to be the go-between for the rest of the world and the true owner of the piece of property. This does not make you the lawyer and it certainly does not make you the responsible party in the case of an emergency or an incident.
To bring back the vehicle accident example above, your trust should spell out your liability regarding an accident or any sort of harm in dealing with the vehicle. If it doesn't, you could be held accountable for any and all damages. You could be there in court right beside the owner due to your involvement with the trust situation.
Needless to say, while this is incredibly unfair to you (since you haven't done anything), trustees are often acquitted of any wrong-doing. This just means that you're out of jail; not off the hook for paying any damages. And usually, your insurance company will not help you with these lawsuits.
Have a lawyer look through the contract before you sign it to keep yourself safe. Even if the person you are assisting is a close friend, we all make mistakes and they may overlook something that needs to be spelled out.
Final Thoughts
Holding a trust as a trustee is a wonderful service to offer someone that you trust and care about. The work is usually not gainful in any sense of the word, but it may assist others in some way that is gainful. Trustees shouldn't get into the line of helping for a "kickback"-style return, but do be aware that some people do this regardless of the ethics behind it. If you decide to be a trustee, protect yourself first.