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Are Living Trusts Legal For Asset Protection ?
A living trust is a legal document that resembles a will. It includes instructions for what you want and how you would like to handle your assets after your death. But unlike a will, it does not involve probate at death, allowing your heirs to inherit the property immediately after your death. |
It also prevents the court from having any control over the assets, if in case the person becomes incapacitated. It allows the owner of the property to choose a trustee in case of incapacity.
A living trust has no asset protection from creditors or lawsuits. But it can be named as the owner of the structure that protects your assets, such as a Family Limited Partnership (FLP) or Limited Liability Company (LLC). This way the assets are protected while you are alive and will be transferred immediately according to the wishes of the person. Legally, you no longer own the property, rather the assets are owned by the LLC. However, with the combination of a LLC or a FLP and a living trust, you still can do everything like buy/sell assets like you could when you owned them. Nothing changes with regard to the operations of the property.
Through adopting a living trust to protect assets, one can avoid probate at death, prevent the control of the court on your assets, ensure privacy, ability to distribute assets among the beneficiaries more quickly, reduce or eliminate estate tax, make it difficult for the family to interfere with it and also ensure a professional management of your assets.
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Are Living Trusts Legal For Asset Protection ?
