If you own real estate property in the US and someone googles your name and the town you live in, chances are that person will stumble on your property records. They’ll be able to see things like the price you paid for your house, its most recent valuation and tax assessment, and may even be able to find floor plans or images from the prior listing. Creepy, right?
Fortunately, if you want to keep your real estate ownership private, there are several strategies you can employ when purchasing your home:
- Purchase the home through a third-party
- Purchase the home with an LLC
- Purchase the home through or transfer it to a revocable living trust
Purchasing a Home through a Third Party
You might consider purchasing your home through a third party, such as a family member with a different last name or business partner.
The deed would list the third party’s name (not your own), keeping your ownership of the property private. Behind the scenes, you and the third party would need to work out a separate legal arrangement to ensure that you retain all rights and ownership in the property. The third party may ask for a fee in exchange for providing these services.
Purchasing a Home through an LLC
A second option to keep your real estate transactions private is to purchase your home through a limited liability company (LLC).
Similar to purchasing your home through a third party, the deed would list the name of the LLC (not your own name) as the owner of record. As long as you own and control the LLC, you’ll retain complete ownership of the property and have all the same rights and privileges as if the deed were titled in your name directly.
If you purchase your home through an LLC, you may incur additional costs compared to if you purchased your home directly. If you don’t have an LLC already, you’ll need to register a new one with your state’s secretary of state, which can cost as much as a few hundred dollars. Since LLC registrations are public record, you’ll want to register through a third-party intermediary such as a registered agent, which might carry additional costs.
In addition to the formation and registration costs, you can also expect to pay recurring annual costs for keeping your LLC registration active. Depending on your state, this might include annual report fees, filing fees, and/or franchise tax fees. Taken together, these fees can range from as little as $50 to several hundred (or more) dollars. As just two examples, you can expect to pay a minimum of ~$50 in New York for annual report, filing, and franchise tax fees. In California, you’ll pay $20 every two years to submit a Statement of Information and an $800 minimum franchise tax per year, regardless of the business’s financials.
But it’s not all bad. Aside from the privacy benefit, purchasing your home through an LLC delivers additional benefits that you may judge outweigh the cost drawbacks. Depending on your situation and how you structure and manage your LLC, these might include estate planning, tax, and liability benefits.
With the right structure, your LLC will qualify as an operation of law (non-probate) asset, enabling you to avoid your house moving through probate if you were to pass away. Moreover, if the LLC you use to purchase the home is the entity running a broader family business, you might be able to later transfer shares of your LLC to family members at a discount that avoids triggering the federal gift tax.
Purchasing a home through a Revocable Living Trust
The third way to purchase a home while keeping your identity private is to do so through your revocable living trust.
The name of the revocable living trust will be the one that goes on the deed and other public records, and therefore, you’ll want to make sure that the name of your trust does not contain your name (the standard naming convention for most revocable living trusts) or another name that can be easily tied back to you. Similarly, pick one of your non-related co-Trustees to sign for the trust in the manner, "[Your Co-Trustee Name] as Trustee for the [Your Trust Name]" so that you don’t inadvertently expose your identity as a co-trustee and signatory.
Similar to purchasing your home through an LLC, purchasing your home through your revocable living trust makes that real estate property an operation of law asset (i.e., non-probate asset) enabling more efficient estate administration if you pass away.
In contrast to purchasing your home through an LLC, you don’t have to worry about recurring costs when you purchase your home through your revocable living trust. However, you will want to take care to make sure that you route all payments for real estate property tax and other local fees through your revocable living trust as opposed to paying them directly. This payment structure helps avoid inadvertently exposing your identity.
Step by Step Instructions for How to Set up Your Trust to Purchase Your House Anonymously
When you create your Trust with Just In Case Estates, you can use our step-by-step guide to make sure that your trust is set up properly to help you purchase and own your home without revealing your identity.
If you have any questions along the way, our Just In Case Estates Member Success team is available ‘live’ to support you.
Additional Considerations for Keeping Your Identity Private
We revealed three strategies for how to keep your real estate transactions from becoming public record:
- Purchase through a third-party
- Purchase through an LLC
- Purchase through your Revocable Living Trust
For extra measure, you could ask the seller and all other parties involved in the transfer of ownership to enter into a non-disclosure agreement (NDA) regarding the transaction. Whereas the three strategies focus on what the public records show, the NDA addresses the individuals’ knowledge by legally binding the signing parties from publicly sharing private any private information that they may have learned about you or your trust as part of the transaction.
Which strategy you employ to keep your real estate ownership private is a personal decision. In comparing the benefits and drawbacks to each one, we believe that purchasing your home through your revocable living trust is the cleanest approach most people will find best suited for them.
If you haven’t already created your revocable living trust, or would like to make a new one at a fraction of the cost of working with an estate planning attorney, you can do so today in as little as 20 minutes with Just In Case Estates. We offer the best value in online estate planning and are the highest rated estate planning company on TrustPilot.
