OPTIMAL WEALTH STRATEGY GROUP
Beneficial Trust | Business Trust | Charitable Trust | Real Estate Trust...
Getting the Right Trust
For example, if you're considering placing your property into a trust, it's crucial to choose the right type. Not all trusts offer the same level of protection, and legislative law trusts, often grantor trusts, may not provide the desired security. Our trust, however, stands out as a non-grantor trust, offering a distinctive advantage.
Being a non-grantor trust means that while you act as the trust manager, you're not the owner. The trust has its own EIN number, allowing it to own property outright rather than simply holding it. The process involves selling your property to the trust, transforming the dynamic. You retain control as the trust manager, but you no longer own the property.
This subtle yet crucial distinction between control and ownership is where the power lies. Ownership comes with potential liabilities, making your assets susceptible to being taken away. On the other hand, controlling assets without owning them provides the benefits of ownership without the associated liabilities. Following this strategy not only applies to your home but extends to all your assets, aligning with the philosophy of figures like Nelson Rockefeller, who famously said, "Own nothing, control everything." This approach is a cornerstone for maintaining wealth, as it minimizes the burdens of ownership and maximizes control.
Can a Trust be sued?
Can you sue a trust? Well, technically, you can attempt to sue anyone, but let's break down how it really works. The trust agreement, essentially a document, is shielded from lawsuits according to a ruling by the Supreme Court, specifically for spendthrift trusts.
Here's the rationale behind it: You can't sue a document because a document doesn't possess a mind or the ability to make decisions. It certainly can't break the law. In contrast, a trust has a trustee – an individual with a brain, decision-making capacity, and the potential to break the law. The trustee is responsible for managing the trust. So, if the trustee engages in unlawful activities, the logical course would be to pursue legal action against the individual trustee.
The protection extends to the spendthrift trust itself. If an individual, acting as a trustee, violates the law, you can't directly target the trust's assets because of that person. However, there's a crucial nuance. If the trustee misuses the trust to break the law, the trust agreement loses its protective status, becoming null and void. Using the trust as a tool for illegal activities compromises its immunity.
On the flip side, if an individual breaks the law entirely unrelated to the trust, the assets within the trust remain untouchable. In such cases, no one can access those assets. The trust, in this context, becomes impenetrable, providing a robust layer of protection against external legal challenges. Understanding these nuances is essential for ensuring the legal integrity of your trust structure.
