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Great. Thank you for your questions.
But I actually have to leave in a few minutes. Can you post the awnser and I will view it later?
Yes, but with one request.
Any clarification needed before I leave?
Have to go...I understand if you have to pass off the answer.
I think your question is pretty clear. I would just ask two things. First, if you need additional clarification after I give my answer, please just let me know. I do promise to get back to you as soon as I become available thereafter. Second, if you are satisfied with my help, please just post a note letting me know--that way, I will have confirmation that you have seen the answer and you have no further questions. Is that fair? :-)
Yes, I have used this service before. I understand the importance of the rating, and always rate high when the answer is thought out.
Great. Have a good evening.
I will post shortly. Take your time viewing and responding to the answer. Thanks.
Thank you so much for your patience. I should start by clarifying that because the nuances of every case are different, this information should not be construed as complete or advice without consulting in person with counsel. That said, we should first discuss the nature of living trusts. The primary function of a living trust is as a testamentary device--it is very much the same as a last will and testament, except that it allows the trustor/trustee/beneficiary's heirs to avoid probate. A living trust is also called a "revocable trust", and it does not provide any liability protection to its trustor/trustee/beneficiary.
There are different types of irrevocable trusts, and they are more likely to be able to protect the assets in the trust. However, the reason that the assets can sometimes be protected is because of the nature of irrevocable trusts--the person/people who manage the assets of the trust (the trustee[s])--can only use the assets for limited purposes. Also, the trust generally cannot be dissolved at will--when assets go into the trust, they can't be taken out unless for an approved purpose. In other words, the trustees do not have full discretion in how the assets can be disbursed. An example of one type of irrevocable trust would be a special needs trust, which allows the assets therein to be used to provide for the special needs of individuals with a physical or mental disability.
Whether there is one trustee or multiple trustees, any protection depends only on the type of trust.
The trustor/grantor is the individual who creates the trust. The trustee manages the trust for the beneficiary. The beneficiary is the person for whom the trust was created to benefit. The debt of the trustees is actually irrelevant to the assets of the trust, unless the trustee is also the trustor/grantor or beneficiary because the trustee only controls the trust assets--the trustee does necessary have a right to any of the trust assets.
Likewise, the assets in the trust do not affect whether the trust is protected in the event of liability--it depends on the type of trust. Stocks would not have any protection by being in a living trust, but they generally would be protected if held in a special needs trust (for example).
I hope that is clear. Let me know if further clarification is needed, and please feel free to leave positive feedback once you are completely finished. Thanks.
What if the trust has multiple trustor/grantors?
If 3 people are named as the trustors, and another 3 as the beneficiries in a trust with a $100,000...what happens if one of the three trustors or one of the three trustees gets sued for a large amount? Is the $100k safe?
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