What Is An Asset Protection Trust

A trust is a bond between a grantor and a trustee. An asset protection trust is made for the benefit of a third person, or even the grantor in case of self settled trusts. The trustee needs to manage the assets that are being protected to the benefit of the beneficiary.

With an asset protection trust, you can transfer your assets to a trustee. This might sound bad, but it is the best asset protection tool available. If the ownership title of your properties is no longer in your name, they can't be taken away in lawsuits. The trustee has the legal obligation to manage assets in the best way possible and he can't benefit from them in any way. This means that you can control your assets from distance and still benefit from them without having ownership. Trusts are becoming more popular and there are many ways to set up a trust, some better than other.

The best asset protection trust is an irrevocable trust. Because revocable trusts allow you to revoke them at any time, in case of a lawsuit the judge has full control over your assets and he can decide in the favor of the plaintiff and you can lose your assets. On the other hand, an irrevocable asset protection trust is the best way to protect your assets. Through this trust you give control of your assets to a trustee and your assets are permanently safe. If you don't feel confident in doing this, you can get a trust protector, a person that makes sure that the trustee is managing your assets to your benefit. This is just a safety measure, but you don't really need it. Along with an irrevocable asset protection trust, you should think on other layers of protection, like limited liability companies.

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