People rarely want to give up control of their trust and assets. It is possible to be the trustee of your asset protection trust, but it must be set up properly so that an independent trustee can step in when needed.
Colin Ley is an asset protection attorney and the creator of the PREP Trust® and Better LLC™. He is also the co-founder of LayRoots (along with with partner in life & business – Shreya Ley)
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Transcript:
Howdy, folks. Colin Ley here of LayRoots. We are an estate planning and asset protection law firm. Had a question from someone about how they could be the trustee of their asset protection trust and still have asset protection. And it’s a great question. As a quick reminder before we get there, if you have questions about your asset protection plan please visit livemorecarefree.com. You could book a free initial chat with us. Again, that’s livemorecarefree.com. So, when people hear about asset protection trust, asset protection, the thought of giving up control of their assets, of their trust to someone else, to an independent trustee, someone they’ve possibly never met before, that idea does not typically sit that well with people. People want to still have access to their assets. They want to be in control of their assets. It’s hard to think about giving up those benefits. And a lot of attorneys will tell you that you have to do that in order to have asset protection and maybe that is the best practice, but it’s not necessarily always required. You see, if times are good the seas are calm, the skies are blue, there’s no possible legal threat, I think it is okay for a person to be the trustee of their own asset protection trust. That’s how all of our prep trusts are set up. People want to maintain control. And I think that’s fine. The issue is if you do get into some sort of legal trouble you don’t want to be the trustee anymore. You can’t have asset protection, you can’t maintain that asset protection if you’re in court, if theirs a legal threat against you and you are in control of those assets. At that point, you have to have an independent trustee who is managing the assets, managing the trust for your benefit, but they have to be not within your control, because if a court tells you to tell your trustee to give you money, if they are required to follow your orders, again, there’s not gonna be any asset protection in that scenario. So the way we approach it is that we have our clients. They start as the initial trustee of their trust, but we have a special successor trustee in place, an independent trustee that doesn’t have to listen to a US judge, so if there is a legal threat, at that point, client can decide with our advice whether they need to step back from controlling their trust and step away from that role of trustee. So you can have asset protection as the trustee of your own trust when times are good, but you have to have it set up and arrange properly so that if something does happen you’re able to step back and no longer act as the trustee for your trust. Hope that’s helpful. Thanks for watching. If you have any questions, let us know. Bye.
