Are you looking into asset protection? This is a very specific and involved process, but it can be worth it for you and your family. Asset protection laws can vary from state to state and it is vital especially if you have developed a real estate investment portfolio in St. George. So what is asset protection?
What is an asset protection trust?
A trust is a contract that manages property between a grantor, trustee, and beneficiaries. A grantor is a person who establishes the trust, they are also known as the settlor or trust maker. The trustee is the person who manages the property. A trust will set terms and conditions for managing the property that is held in the trust. When a trust is drafted the grantor conveys the property to the trustee to manage the property avoiding the terms on their behalf.
What are asset protection requirements?
In the state of Utah, the grantor needs to be solvent after transferring property to the trust. The property needs to be transferred before any creditor issues possibly arise. The grantor cannot be a trustee making any distribution decisions. Finally, the distribution of the assets is discretionary.
What does an asset protection trust do for you?
An asset protection trust prevents any creditor from taking any trust assets to satisfy a claim. When a creditor can not compel the use of any tryst asset they are limited to distributions that are made to the settlor or beneficiaries.
What is specific to Utah asset protection trusts?
Utah has what is called domestic asset protection trust statutes. An asset protection trust is a very complicated financial planning tool that is designed to protect your assets converted to the trust. Utah’s asset protection trust laws allow you to fund a trust with any type of assets you want to protect. You will maintain complete control over the investment of your assets in the trust and you can name whomever as a beneficiary to receive assets of the trust.
For your trust to be effective you will need to have the names of at least one Utah trustee. You must sign an affidavit declaring that you are solvent after contributing to the trust. The trust must be irrevocable but you can build in flexibility to allow for the removal or replacement of trustees.
To learn more about buying or selling a home, contact our office of real estate experts! This information is brought to you by: Erika Rogers – real estate leader in St. George, UT and surrounding communities. She specializes in new construction, golf course communities, gated communities, 55+ adult communities, St. George luxury real estate, and foreclosures in all Southern Utah communities.
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