Why Use A Trust?
We use a “Personal Property Trust” agreement as the entity to hold the note with both joint venture partners as the Beneficiaries or owners of the asset. The trust agreement is basically the same as a land trust in that the trustee is essentially a nominee title–holder acting at the Beneficiary’s direction. Like the land trust, the paper trust is a revocable, living trust. The same rules for tax reporting apply — there is no gift tax or income tax consequence of placing title to your paper in the paper trust. You still retain full control of your trustee, so no fiduciary tax return is required. Like the land trust, the primary purpose of using the personal property trust is to keep your name off the public records, and hold the note in an entity that is less expensive than creating a LLC. Below are some resources to learn more about using trusts.
Resources for using a Trust:
http://www.legalwiz.com/personal-property-trusts/
http://www.biggerpockets.com/renewsblog/2009/03/11/land-trusts-asset-protection/
Here is a good overview of how a land trust works from Bill Bronchick