Bare Trust

A bare trust is a structure where legal title is held by a trustee but the beneficiary retains full control and benefits of the property.

Bare Trust

September 30, 2025



What is a Bare Trust?

A bare trust is a trust arrangement in which the trustee holds legal title to property on behalf of a beneficiary, who retains all rights to income, control, and decision-making. The trustee has no independent power beyond following the beneficiary’s instructions.

Why Bare Trusts Matter in Real Estate

Bare trusts matter in real estate because they allow property to be held for tax planning, estate planning, or privacy purposes. They can also simplify transactions where ownership is separated from beneficial interest.

Example of a Bare Trust in Action

An investor places a property into a bare trust with a trustee holding legal title. The investor remains the beneficial owner, directing all decisions and receiving all income.

Key Takeaways

  • Trustee holds legal title on behalf of beneficiary.
  • Beneficiary retains control and income rights.
  • Used for tax planning, privacy, and estate purposes.
  • Common in investment and succession planning.
  • Trustee acts only under beneficiary’s instructions.

Related Terms

  • Trust
  • Beneficial Ownership
  • Estate Planning
  • Property Transfer
  • Legal Title

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