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A nominee, in the context of a bare trust, is an entity or individual who legally holds assets on behalf of another entity or individual without having any control over those assets. Essentially, the nominee is the name on the record, but the beneficial ownership rights belong to another person.
A bare trust, also known as a simple trust, is a basic type of trust in which the beneficiary has a right to both income and capital and can call for both to be remitted to them immediately if they wish. The trustee (the nominee, in this case) has no discretion on how or when to distribute assets as they are legally bound to follow the instructions of the beneficiary.
So, in this setup, the nominee (acting as the bare trustee) simply holds the legal title of the assets, but all the benefits, responsibilities, and control over the assets lie with the beneficiary. This can be used in a variety of financial circumstances, such as in brokerage accounts, where the brokerage firm may be the nominee holding assets on behalf of the actual owners.
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