What is a bare trust agreement and do I need one?

A bare trust agreement is a declaration of a trust arrangement between a “nominee” and a “beneficial” owner. The beneficial owner of the property is the person who makes a capital contribution towards the equity in the property. For reasons of convenience, estate or tax planning, a beneficial owner may appoint someone else to hold the title to the property or join in the legal ownership (a “nominee”). The agreement will define that the nominee must follow the directions of the beneficial owner when dealing with the property and will receive proceeds from the sale of the property.