Posted by Bill Bronchick on May 25, 2004 at 10:13:39:
A creditor can definitely attach your interest in a trust. If the beneficiary of the trust were a limited partnership or LLC with shared interests, then the creditor would be limited to a charging order against your LLC or partnership interest.
Will shared % in trust stop deep pocket judgment? - Posted by Glen SoCal
Posted by Glen SoCal on May 25, 2004 at 01:05:42:
This is theoretical.
If a property owner puts their property in to a trust, and names themselves a beneficiary, and gives a small portion (5%) of the value to another beneficiary, does the property become personal property, and not realty and in so doing thwart attachment in a judgment from some unfortunate legal outcome? This asset protection idea was gleaned a while back from info provided by the PAC trust folks.
I understand that a judgment against a debtor can pierce a trust owned soley by them. And that a shared trust has protection if the second benificiary is not involved in the judgment against the first, as the second benificiary cannot be made to suffer for the first’s beneficiarys fault given the legal protections provided in a shared trust.
A friend of mine is considering asset protection, beyond insurance …and keeping his nose clean, and asks if the above described scenario has merit.
Thank you for any insight,
Glen