Asset Protection Trust

[Need4Speed]

Can someone explain how an Asset Protection Trust works? What it will and will not protect?

 

[TrustUser]

one of the things that people are confused about regarding trusts, is all these types of trusts.

many of these trusts are given special names, based upon their goals. but there is no real legal animal.

no legal animal called an asset protection trust. no legal animal called a living trust.

in my opinion, the most distinctive facet of a trust is whether it is revocable or irrevocable.

assets are not really able to "be protected" while the trust is revocable.

once it becomes irrevocable, and has the proper clauses in it, the trust does have many protections from creditors of its beneficiaries.

but a common notion exists that assets can be protected by simply putting them in a trust, as if a trust is something magical. this just is not true.

 

[Need4Speed]

Thank you for the reply, so how can one protect their assets facing litigation?

 

[FlyingRon]

If you are already facing the litigation, you probably can't. Even moving assets into a irrevocable trust can be challenged. If they were already in the irrevocable trust prior to you committing the act that you are being sued for, you might have a chance.

 

[tranquility]

Go to a bankruptcy or asset protection attorney. There are some things you can do which will be to your advantage. But, don't think you can put all your assets in a place where you can own and use them completely and creditors cannot reach them. (Notwithstanding the issue regarding fraudulent transfer issues if applicable.)

 

[Need4Speed]

I caused an accident that did very little damage to the other vehicle. I was sent a letter from an attorney demanding I pay X amount, I sent it to my insurance company. That's basically where we're at now. I have been told that they can go after my assets which total less the 30K. What about selling items to relatives? Can they still go after those items? Thanks again for all the help.

 

[curb1]

Your insurance company should cover the cost of the accident if it is a standard policy. What did your insurance agent say about this?

 

[Need4Speed]

Insurance Rep said she has been talking with the attorney, things are "amicable". I'm afraid the insurance will pay X amount and the other party won't be happy with X amount and want more. I'm just trying to protect everything.