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Trusts

When it comes to asset protection, the motto of many people might be “In trusts we trust.” A trust is an entity you can create that can hold title to (a fancy way of saying “own”) assets for the benefit of yourself or anyone else you choose. There are many reasons for having trusts, from being able to have your assets managed for you, to avoiding estate taxes, to protecting your assets from the claims of creditors or people who may sue you. There are many different kinds of trusts and the terms and requirements of these many different kinds of trusts vary considerably.

Safeguards for Trusts

An important thing to remember is, as a general rule, if you can get at the assets in your trust, so can your creditors. So, if you have a living revocable trust from which you can get money whenever you wish and the terms of which you can change whenever you wish, the assets that you have in the trust are not protected from creditors. However, you can set up a trust with truly independent trustees who have sole discretion as to the right to assets in the trust and any income earned by those assets. With such a trust, you can protect those assets from the claims of creditors or people who might sue you.


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