Anonymity

Introduction

Anonymity in holding assets—whether cash, corporate interests, or real estate—is a prized commodity. Release of the Pandora Papers in 2021 revealed that corrupt world leaders secretly owned property ranging from a $22 million chateau on the French Riviera to numerous beachfront mansions in Malibu, all facilitated by anonymous shell companies. In the past two decades, favorable secrecy laws in certain U.S. states have resulted in America becoming the world’s largest haven for anonymous entity formation, cash accounts opened in the name of such entities, and the opaque ownership of real estate. The Pandora Papers have been followed by a significant expansion of federal regulation and a sharp reduction in viable anonymity strategies.

This article will address two principal areas: (1) entity-formation anonymity when organizing a new LLC or corporation and (2) transactional anonymity in the conveyance of Texas real estate. An emphasis is placed on how these two factors impact real estate investors.

Litigation Nation

Oligarchs and dictators have obvious reasons for wanting to move their assets into the safety of U.S. banks and real estate; but for others, the driving force behind seeking anonymity is not illegality but the risk of litigation and fear of judgment execution on one’s personal assets. Just as U.S. banks and land are relatively safe, U.S. courts—where anyone can sue anyone for anything and seldom pay a price for doing so—are not.

Why is there so much litigation in America? Three reasons: first, contingent-fee arrangements allow attorneys to profitably pursue dubious cases and then utilize the legal system to harass legitimate businesspersons into settlement; second, because the American justice system for the most part imposes no penalty upon frivolous lawsuits (The “loser pays” rule exists in Canada and elsewhere but not in the U.S.); and third, courts are heavily utilized in the U.S. as part of the overall social rulemaking apparatus. When new legislation passes congress, that is not the end of the process. It is routine for lawsuits to then be filed by special interests, often fed by dark money, seeking to challenge all or parts of a new law. Only after the dust of litigation settles do Americans have a clear idea of what the rules will be.

Another factor is the rise of litigation financing. There are now specialized lenders who will provide law firms with funds necessary to pursue even the most complex and expensive lawsuits—all in exchange for a piece of the action. This is an odious business, part of Wall Street’s financialization of everything, and inimical to the common-law tradition of the fair and just resolution of legitimate disputes between parties who have standing in a court of law. Given the prevalence of litigation and Wall Street’s eagerness to fund it, is it not both rational and legitimate to seek a measure of anonymity?

Disclosure Bias

The American system of state-level entity filings and county-level property recordings is designed to facilitate disclosure, not concealment. This is an institutional bias that generally weighs against anonymity in business and real estate. Though some states are more permissive than others, it has always taken a certain level of determination and creativity to remove oneself from public view.

Historically, invisibility in real estate transactions has been reasonably feasible by using anonymous entities, layered structures, and trusts. This is changing, however, especially in transactions that involve cash or foreign entities. And when it comes to the meaning of cash, the reference is not just to green folding money but to any transaction where a loan is not required for closing. It is interesting that society has arrived at a place where not incurring debt may constitute suspicious behavior.

Relativity

All of this leads us to consider Einstein’s theory that traveling at lightspeed is impossible because doing so would require not only infinite energy but infinite mass. A spacecraft can approach this speed limit but never actually reach it. Given increasing legal constraints, one must now concede that anonymity is like that as well.

Consequently, we should distinguish between absolute anonymity, which is nearly impossible to achieve in an informed and interconnected world, and relative anonymity, a more attainable goal. Since one can approach absolute anonymity but not actually arrive there, an effective asset protection strategy should seek to maximize relative anonymity by moving the needle as far as possible in that direction. How far can that be? It depends on the circumstances as well as a willingness to be creative, unconventional, and spend lots of money on legal and tax support. There is no longer any such thing as inexpensive anonymity.

Key Anonymity Questions

Accepting that limitations exist—that anonymity is relative—can lead to specific strategies for maximizing whatever anonymity may be feasible in the circumstances. Before constructing such strategies, there are four key questions:

(1) From whom does one seek to be anonymous?

(2) At what level of society and government does one seek to establish anonymity?

(3) What resources are available for achieving this goal?

(4) And, for those operating internationally, in what country or geographical area does one seek to be anonymous?

The last of these questions will be left to a different article. Our assumption here is that the United States is the locus of operations.

FEDERAL REGULATION IS EXPANDING

Suspicious Activity Reports

The Bank Secrecy Act (BSA, 31 CFR 1020.320) has since 1996 required banks to screen financial transactions for indicators of financial crime and report suspicious activity—evidence of money-laundering, drug trafficking, terrorist financing, or tax evasion—all of which typically involve large sums of cash. Suspicious activity reports (SARS, 12 CFR 21.11) were originally filed with the FBI but since 2012 are e-filed with the treasury department’s financial crimes division (FinCEN). SARS must be filed within 30 days and retained in the records of the financial institution for 5 years. Around 3 million SARS are filed each year (the number is growing) but only a small number are ever acted upon.

The BSA is the origin of the $10,000 rule which began the gradual but inevitable trend toward criminalization of cash. Cash is already viewed with such suspicion that if one is stopped for a broken taillight and a sizeable sum of cash is found in the car, police at any level (city, county, state, or federal) will simply take it—no evidence or formal charges required—leaving the owner to spend years fighting the system to get it back.

Geographic Targeting Orders

For a number of years, FinCEN has used geographical targeting orders in cities and regions of the United States where money laundering is common. GTOs are in effect for nearly a dozen major metropolitan areas including New York, Miami, and Los Angeles.

GTOs require reporting of transactions involving higher-dollar residential properties that include cash and companies formed offshore. These currency transaction reports (CTRs) require disclosure to FinCEN of the purchaser and any beneficial owner controlling 25% or more of the entities involved. A lender or title company must also obtain valid government-issued identification from the parties. GTOs are focused on cash transactions and do not presently encompass transactions accomplished solely by wire transfer, even if the wire originates in an offshore tax haven.

The consensus is that GTOs have not lived up to expectations. Offshore entities seeking to launder cash have simply moved beyond the geographical borders of GTOs or into commercial properties, thus escaping the net. Since GTOs have not worked especially well, it is easy to see why FinCEN decided to come up with beneficial ownership rules.

Beneficial Ownership Rules

The Corporate Transparency Act (CTA, 31 U.S.C. Sec. 5336, effective January 1, 2024) is a transformative federal law that is being implemented by FinCEN. The stated goal is “to combat, to the broadest extent possible, the proliferation of anonymous shell companies that facilitate the flow and sheltering of illicit money in the United States” (FinCEN’s 2021 Notice of Proposed Rulemaking).

FinCEN regulation and enforcement now goes well beyond GTOs. The new beneficial ownership rules (31 CFR Chap X Part 1010) require disclosure of personal information on the beneficial owners (the true parties in interest) behind all LLCs, corporations, and other registered entities with a presence in the United States. This applies to both new and existing companies (although different deadlines apply) and includes an obligation to file supplementary reports as beneficial ownership interests change.

The CTA and FinCEN are driving an unprecedented expansion of federal power into entity formation, an area that has traditionally been the exclusive province of the states. There is now a distinct federal component to forming an LLC and failure to comply can incur both civil and criminal penalties, including jail time.

It is clear that anonymity has become a more problematic proposition, at least at the federal level. However, as revolutionary as CTA/FinCEN enforcement is, beneficial ownership rules are (for now) only about reporting information to FinCEN’s (supposedly) secure law enforcement database. There is no requirement (yet) of public disclosure.

Information Collected by FinCEN

FinCEN’s database is intended to be secure. On its website, the agency states: “FinCEN researches and analyzes this information and other critical forms of intelligence to support financial criminal investigations. The ability to link to a variety of databases provides FinCEN with one of the largest repositories of information available to law enforcement in the country. Safeguarding the privacy of the data it collects is an overriding responsibility of the agency and its employees-a responsibility that strongly imprints all of its data management functions, and indeed, all that the agency does.”

At present, beneficiaries of beneficial ownership information are limited to the federal government, law enforcement, and prosecutors; but one may legitimately wonder if this information can remain secure with so many invested and competing players. Might it not be hacked and published one day, perhaps by the same investigative journalists who uncovered the Pandora Papers? Or by a whistleblower? (This occurred in 2018 with a leak of SARS information by rogue FinCEN employee Natalie Edwards in an attempt to politically damage Donald Trump). Or worse—by China?

Anonymity Now Suggests Corruption

FinCEN regulation is part of a broader “United States Strategy on Countering Corruption” (an official White House policy document dated 2021) that calls for opposing corruption by promoting transparency. This is part of a worldwide trend driven by governments seeking to tax hidden money, and it has reached the level of a moral crusade.

It will be increasingly assumed that seeking anonymity implies corruption or illegality—an assumption that will inevitably broaden into official policy and enforcement. This will affect both entity formation and real estate (especially when cash is involved) as well as professionals and institutions who operate in the real estate industry (gatekeepers such as title companies, lenders, real estate brokers, and attorneys).

In a world of beneficial ownership rules and intensified KYC (know-your-customer) policies, the pairing of anonymity efforts with cash will automatically raise suspicions among the gatekeepers. Anyone seeking anonymity needs to be prepared for this.

Refer back to the key questions asked above: is the goal to be anonymous at the federal level, i.e., anonymous from FinCEN and other federal law enforcement? If one acts legally, this is now effectively impossible when forming an LLC in the United States—even if the LLC is intended to be used for a mundane local purpose like painting neighborhood houses. FinCEN will want to make sure you are not secretly funded by a sanctioned Kremlin oligarch.

This is a new environment. Thus far, however, most existing strategies for achieving anonymity at the state and local level retain viability—depending on context, goals, and specific circumstances. To say that caution is now required in formulating an anonymity plan would be to understate the case.

The Role of Gatekeepers

Title companies, lenders, real estate brokers, and attorneys will be more cautious in light of beneficial ownership reporting rules. The customer due diligence rule (DDR, 81 FR 29398) already requires banks and title companies to be aggressive in verifying the identity of their customers. This trend will expand and spawn questions such as “What is the source of that cash?” and “What island in the Caribbean did you say this entity was formed in?” Gatekeepers will no longer be mere order-takers. They will have questions and KYC/DDR policies of their own.

The trend is toward unofficially deputizing gatekeepers across the financial and real estate industries. It is conceivable, perhaps inevitable, that all gatekeepers will one day be required to file suspicious activity reports. The risk for not doing so? Potential indictment as a co-conspirator (conspiracy being the favorite catch-all device used by prosecutors everywhere).

As for lawyers who form LLCs and other entities for their clients, it is already the case that law firms are refusing to file LLC formation paperwork unless all beneficial owners are fully disclosed in advance.

The implications are obvious for anyone choosing to pursue an anonymity strategy in either entity formation or real estate. Who can you trust in a world where everyone, including your attorney and real estate broker, is a federal agent?

ANONMITY IN REAL ESTATE TRANSACTIONS

Transactional Anonymity

Clients commonly ask three anonymity-related questions in connection with real estate transactions:

(1) How can I hold title to property without revealing that I am the true party in interest (this question has to do with status of title, meaning where does true ownership reside)?

(2) How can I transfer property held in my personal name to my LLC without showing that it came from me (this pertains to chain of title, meaning what is the recorded link between seller and buyer)?

(3) How can I blend anonymity features with the liability shield of an LLC in order to form a more effective asset protection structure?

When discussing anonymity, three important groups in the real estate world must be considered:

(1) lenders who are subject to due-diligence rules, KYC policies, and the requirement to file SARS in questionable cases;

(2) title companies that examine and insure both status and chain of title; and

(3) county clerks who maintain real property records in order to index and accurately reflect the chain of title.

Anonymity and Chain of Title

There is no effective method of defeating, ignoring, or bypassing the chain of title. Each link in the chain is represented by a deed publicly recorded in the county clerk’s office—and one cannot break the chain of title and still preserve one’s status as record owner. A broken link equals questionable title, and questionable title equals unsellable property.

So what is the response to the question posed above, “How can I transfer property held in my personal name to my LLC (or other entity or person) without showing that it came from me?” The answer is that you cannot and still maintain the chain of title.

A creative technique in such cases is to cause the property to pass through a number of intermediate transfers so that its origin is progressively more remote in the chain. The more these intermediate transfers appear to be bona fide sales for consideration, the more likely the original transferor is to remain in the background, somewhat beyond scrutiny. This is a way of stretching out the chain of title but not avoiding it. What one achieves is transactional distance—a form of relative rather than absolute anonymity.

Anonymity and Status of Title

For purposes of this discussion, status of title refers to how title is officially stated in the county clerk’s real property records. Is it owned personally and individually? Is an entity the owner? Is it community property of husband and wife?

Title to property can be held in a surprising variety of capacities—as an individual, a corporation, a limited liability company, a general or limited partnership, in a trust, and so forth—or as a combination of any of the foregoing. Property law is flexible in this respect. What if an investor wants to hold 50% of the title in a personal name, 25% in an LLC, and the remaining 25% in a family living trust? No problem. Whether or not it is wise to structure ownership in such a way is another matter (Probably not).

Searching real property records and determining the identity of actual stakeholders and decisionmakers behind entities, trusts, and layered structures can be challenging in the absence of a mandatory disclosure regime. This is exactly what FinCEN is attempting to achieve with beneficial ownership rules—to shine a light behind and beyond the real property records in order to identify the true parties in interest.

Unrecorded Interests

It is certainly possible to purchase, own, and convey property without filing transfer documents in the real property records. There is no law or requirement that deeds must be recorded. Unrecorded conveyances are legal and binding between grantor and grantee. It is likewise possible to purchase, own, and convey property without ever buying a policy of title insurance or entering the offices of a title company or lender. Accordingly, an obvious solution to the anonymity problem is to pay cash for real property and not record the deed.

The drawback for the seller is that the seller’s name remains both as owner in the chain of title and also the person to whom appraisal districts will send the tax bill.

The drawback for the buyer is that unrecorded interests are difficult to sell, at least for market value. How would a prospective buyer verify the seller’s ownership and the property’s freedom from liens? Also, buyers in the real world usually want title insurance and their lenders will require a sound and publicly-recorded chain of title before granting a loan.

Anonymity Begins with the Contract

Acquisition of real property begins with an earnest money contract that includes the name and address of buyer and seller. Although earnest money contracts are seldom recorded, they can be the start of anonymity issues since dealing with realtors, appraisers, inspectors, surveyors, title company personnel, and neighbors is often a semi-public process—and the people involved invariably chatter about pending transactions. They also generate a lot of discoverable paper.

Contracts can either convey a lot of information about the parties or just a small amount of it. For instance, is there any reason to list one’s home address as opposed to a postal box? A home phone versus an office or cell phone? It is generally prudent to avoid providing more personal information than is essential to make the deal—and say nothing to a realtor that you do not expect to be conveyed to all other participants in the process.

And/Or His or Her Assigns

There are a couple of choices worth considering at the contract stage: either show the purchaser as an LLC or trust (already formed); or, alternatively, list a personal name for the buyer but follow it with the phrase “and/or his or her assigns.” The latter provides a means of switching into the preferred method of holding title at the last minute before closing.

This is a good option for cash transactions but may be unavailable if the property is financed, since lenders require that the obligor on the note and the name of the grantee in the deed be one and the same. In such a case, real estate investors should promptly transfer the newly acquired property into an asset-holding LLC after closing. (Does this transfer raise due-on-sale issues? Unlikely. It is seldom that a lender accelerates a performing loan because title has been transferred into an LLC for asset protection purposes, but technically it can happen.)

Anonymity Trusts in Real Estate Transactions

In order for a buyer to acquire property anonymously, it is possible for title to be taken in the name of the ABC Trust (for example) with no mention of a trustee’s name. When combined with a postal box address, this can at least for a time conceal the true party in interest. Clearly, this is an aggressive investor technique that can only be utilized for cash purchases.

While county clerks have no problem accepting such deeds for filing, the problem is that a trust is not a legal entity that can hold title (even though trusts often act like legal entities in the real world). A trust is not an entity but a relationship—specifically a contract between trustor and trustee, each with rights and duties as a consequence of the contractual relationship.

Problems arise when a title company is later asked to insure title as part of a proposed sale out of the trust. The title company will correctly assert that a deed into trust without naming a trustee fails as a matter of law. The title company will instead want title to be held by an individual acting as trustee of the trust, so curative action will be required—specifically a re-deeding of the property into trust but this time with express mention of the trustee’s name. The title company will also likely require either a copy of the trust agreement or a certification of trust pursuant to Property Code Section 114.086, so a written trust agreement must in fact exist.

How does an investor plan for this outcome? It should be arranged early on for the previous seller to execute two deeds: one that omits the name of the trustee along with a second one that includes the trustee’s name—but then file only the first deed in the real property records. The second deed should be held in reserve (a “deed in the drawer” technique) in anticipation of a future title company’s objections, ready to be produced and recorded at that later time.

The use of anonymity trusts is for investors who do not mind being lectured by a title company on the subject of trusts not being legal entities and then being required to re-deed the property—which may be just fine with an investor who has anticipated this eventuality and has a back-up deed ready to go. For the investor, this constitutes mission-accomplished since anonymity objectives have been met during the investor’s period of ownership.

Clients occasionally ask their lawyers to create an anonymity trust with their LLC as beneficiary, but there is problem with this approach: structurally, the trustee is outside of the LLC’s liability barrier and thus remains personally exposed to litigation (the naked trustee problem).

ANONYMITY AND ENTITY STRUCTURING

PIR Vulnerability

When considering anonymity in Texas registered entity formation, one must anticipate the disclosure requirements of the Public Information Report (PIR, form 05-102) that must be filed annually with the state comptroller. The PIR is due by May 15th of the year following entity formation and every year thereafter.

At the entity-formation stage, the certificate of formation requires only the names and addresses of the organizer, initial manager(s), and registered agent. Ownership information is not required. However, the annual PIR requires disclosure of (1) the name, title, and mailing address of each officer, director, member, general partner, or manager; (2) each corporation, LLC, LP, PA or financial institution, if any, in which the entity owns an interest of 10% or more; and (3) each corporation, LLC, LP, PA or financial institution, if any, that owns an interest of 10% or more in the entity filing the PIR.

Eventually, therefore, someone determined to discover the true parties in interest behind an entity (or behind real property owned by the entity) can gather important information by accessing the comptroller’s records after the most recent PIR is filed.

PIR vulnerability may be mitigated (but not eliminated) by using layering-of-entities techniques or a trust along with the signature on the PIR of an authorized person (one’s CPA perhaps, since CPAs are often the ones to file a company’s PIR). Recall, however, that all gatekeepers involved in entity formation and real estate transactions—including CPAs and lawyers—will be increasingly wary of serving in such capacities, particularly for a client they do not know well.

Texas has very good asset protection laws when it comes to execution on a judgment against individuals (who have protected homesteads and extensive personal property exemptions) and LLCs (which have charging order protection). As to registered-entity anonymity, however, Texas is not a favorable state. It requires publication of far too much personal information on officers, directors, members, and managers to be considered a good venue for anonymity.

Transfer Vehicles

A simple method of achieving relative anonymity in the chain of title involves establishing a transfer vehicle—an LLC, for example. The first step is to establish the LLC; the second is to transfer the property into its name; the third step involves transferring an interest in the entity to some third person or entity, accomplished by means of an unrecorded sale and assignment of LLC membership interest. This last step reflects the actual conveyance.

As a matter of public record, the LLC continues to own the asset (no change in title has occurred) but the person owning the LLC has changed. There would be nothing in the real property records (chain of title) or in the appraisal district records that identifies the new principal acting behind the LLC.

Note that there would be no warranties of title or title insurance accompanying such a transfer. Another downside for the buyer is that the LLC is acquired with whatever actual and contingent liabilities that come with it—so buyer due diligence is required.

A trust may also be used as a transfer vehicle. This involves (1) establishing the trust with a written trust agreement; (2) deeding the property into the trust; and then (3) transferring the entire beneficial interest in the trust to the buyer. Again, there is no public recording since no deed to the buyer would exist.

Trusts have a drawback, however: there is a trustee (an individual) who is exposed to lawsuits without a liability barrier (Trusts have no such barrier). Many clients assume that an attorney will be willing to act as their trustee in order to facilitate anonymity. This is increasingly doubtful. After CTA/FinCEN, it will be a miracle if one is able to find an attorney willing to serve as trustee of a client’s trust. If an attorney agrees to do so, it will likely be in exchange for prior disclosure by the client of the trust’s purpose, the source of funds, and the names of all beneficial owners along with significant compensation coupled with an indemnity agreement.

The Two-Company Structure

The two-company structure remains the classic way to go—not just for real estate investors but for any business that deals with the public and simultaneously owns hard assets. Layering and other techniques can create additional benefits within the two-company structure in order to enhance it. The goal is separation of activities from assets.

Assets should be held in a holding company (often a series LLC) while dealings with tenants, contractors, vendors, and the public at large are conducted by a separate LLC designated as a management company. The management company owns no meaningful assets and operates as a near shell. It is an intentional target for lawsuits.

The holding company, on the other hand, remains largely invisible and immune. Why? Because it does not directly conduct business with third parties and therefore can raise the defense of no privity. In the American legal system, the absence of privity almost always means that a lawsuit will be unsuccessful (although not inexpensive, since the defendant still must pay attorney’s fees and costs to obtain a summary judgment).

Layered Structures

Layering is vital to maximizing anonymity. It is unreasonable to expect to be able to form a single entity (of any type in any jurisdiction) that will achieve a high degree of both asset protection and anonymity.

Building a layered structure is one of the many points in the process where fees and costs enter the picture: if one cannot afford this, one cannot afford anonymity. Seeking anonymity means working against an international tide of increasing disclosure and transparency. Even partial resistance takes real creativity, effort, and expense. Is one’s budget $2,500 or $25,000? The players in the Pandora Papers likely spent $50,000 or more on each entity including attorneys, trustees, nominee directors, local agents, filing fees, and a bribe or two.

Trust as Sole Member and Manager

In order to increase anonymity, an LLC may be combined with a trust that is listed as sole member and manager. The trust’s mailing address can be shown as a postal box.

The trust can (for a time at least) be named in LLC filings without reference to the trustees who control it. Signatures on annual filings can be by a non-principal, perhaps a lawyer or CPA if one will agree to do it. The Texas PIR requires only the title of the person signing, and the title of authorized representative seems to work just fine for now.

The use of anonymity trusts in entity formation is a creative technique. However, both Texas and Nevada accept filings in this format without issue, both at the initial stage and later in annual filings.

Assumed Name Certificates (DBAs)

Assumed names are useful for entities as a means of achieving relative anonymity in everyday business dealings. As a rule, an LLC should do as much business as possible by and through its assumed name. A bank account should be opened that includes the DBA name and checks should be printed that way. Contracts and leases should be signed using the assumed name whenever possible. Even though research at the county clerk’s office or the secretary of state may uncover underlying ownership, an assumed name is still an important part of the overall layering process.

Can an assumed name be used to hold real estate? Can property be deeded into an assumed name as grantee? The answer is no. An assumed name filing does not create a legal entity. It is merely public notice that someone will be using a different front-name in their business transactions. A deed into an assumed name as grantee likely means that there has been no transfer at all.

Anonymity and the Texas Homestead

The Texas homestead is already protected from judgment execution by Article XVI, Section 50 of the Texas Constitution as well as Property Code Chapters 41 and 42, so anonymity techniques are not generally required for asset protection purposes.

Living trusts are often considered in this context because they are good probate-avoidance devices. A living trust may hold homestead title and maintain its tax exemption but only so long as the trust is a qualifying trust as defined by Property Code Section 41.0021 and Tax Code Section 11.13. As evidence of compliance, some appraisal districts require that the deed into trust state that the current owner will continue to have the right to occupy the property without rent, cost, or charge (except for taxes and other costs and expenses) for life, until the trust terminates on a certain date, or until the trust is revoked or terminated by a recorded instrument.

There is a problem, however: given the requirements involved in becoming a qualifying trust, the usual living trust is simply not an anonymity device. It will be apparent to anyone reading the public record that a certain named individual resides at the address in question.

There are legitimate reasons for seeking homestead anonymity. An example is Tax Code Section 25.025 which allows state judges, district attorneys, peace officers, victims of family violence, and others to restrict public access to their home address. Non-public officials may have good reasons of their own for wanting similar treatment. In such cases, a version of an investor anonymity trust can be used, but the homestead tax exemption might be lost. It may not be possible to preserve anonymity and the tax exemption at the same time. Appraisal districts across the state, like county clerks, follow their own rules and procedures so the outcome of attempting homestead anonymity in any particular county cannot be predicted with certainty.

Conclusion

By now, it should be clear that anonymity is not a simple business. Texas is not Switzerland or the Cayman Islands, especially after the advent of the Corporate Transparency Act and expanded FinCEN regulation. Protecting personal and financial information in entity formation and in real estate transactions requires creativity and a willingness to engage in non-traditional approaches. Even so, the future of anonymity strategies used in association with cash or a foreign entity is not bright.

Real estate investors should steer clear of seminar and Internet gurus who make overblown claims concerning anonymity systems they are marketing. Online documents for this purpose should be avoided since they are seldom suitable for Texas which has a unique Property Code and Business Organizations Code. Also, to be candid, most Internet documents are junk from a lawyer’s perspective and have the capacity to do significant harm.

The time is approaching when achieving anonymity in entities or real estate will be relatively possible only if (1) the buyer is legally prepared in advance with an adequate entity structure built for the specific purpose; (2) the purchase price of real estate is paid in cash or crypto directly to the seller; and (3) a title company is not used as an escrow agent or closing venue for the transaction. Outside of these parameters, the degree of available anonymity is shrinking.