Posted by John Merchant on February 20, 2008 at 09:19:49:
A trust, like any other legal entity, if correctly formed, would have its liability ltd to its assets and its beneficiaries would not then be subject to liability beyond their beneficial interest in the trust.
Unfortunately for laymen, trust law is rather complex and not every trust is safe from being invaded and its assets siezed.
e.g. a revocable living trust first formed, then granted the grantor’s title to his RE, where the grantor becomes the beneficiary, would likely be no liab. shield.
But if that trust grantor had formed an IRrevocable trust where he was NOT the beneficiary, then deeded his RE into that trust, so he no longer had any control over it, likely that would constitute a shield from liability for grantor’s subsequent acts.
IMHO, trusts are not the best legal liability entities that a layman might form for himself…much easier and clearer law in forming one’s own LLC or C Corp.
And today, with RE foreclosures rampant and the banks NOT wanting to call, as per their DOS clauses, those loans that are performing, no matter who has the title, it’s really not necessary to utilize Garmin St. Germaine law to deed a property into a trust to avoid DOS foreclosures.