Message-ID: <3C63ED9D.7D749EEA@mediaone.net>
Date: Fri, 08 Feb 2002 07:24:13 -0800
From: freemen@mediaone.net
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To: lancair.list@olsusa.com
Subject: Re: personal liability
References: <183.32f4f44.2992f9c1@aol.com> <000b01c1af72$fc3a5b60$a5499842@mshome.net> <3C6286B7.97C2C8F3@mediaone.net> <004f01c1b000$35622e80$fe499842@mshome.net>
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Reply-To: lancair.list@olsusa.com

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Bob:

When an Irrevocable Trust is written and administered correctly, no one can
legally seize the assets. Sounds incredible but true. I have been researching
and implementing irrevocable family trusts for many years and am convinced that
they are the ONLY way to go for asset protection. Oh by the way, these types of
trusts are recognized by the IRS and there are great income tax advantages to a
properly managed trust.
It begins to get deep with your very good questions so I'll attempt to be brief.
The only way a "beneficiary" of a trust can be compelled to pay up by a judge is
if the Trust is distributing assets to the beneficiary. You as the trust creator
cannot be a trustee or a benificiary in a pure irrevocable trust for proper
asset protection. You can be appointed as the manager of the trust by the
trustee's and control the assets in trust, but you do not own those assets. A
judge cannot compel a Trust to pay anything to a benificiary if the trustees do
not agree to distribute anything. The trustee's can also take the benificiary
off the trust. Beneficiaries have nothing to do with the managing of the trust.
They are at the mercy of the trustees!
Court precedent over the past decade (or more) has almost totally removed
liability protection once enjoyed by corporations. For any reason, the courts
now routinely hold officers personally liable for the liabilities of the
corporation. However, the only time the veil of liability protection of a trust
has been pierced was when the court was able to prove the establishment of the
trust was for illegal purposes.
If you (or anyone else on this list) would like to continue this conversation, I
believe we should do it privately. Send me your email address and we can
continue if you'd like.
Research Irrevocable Trusts and Unincorporated Business Organizations on the
net. There is a lot of crap out there but a lot of good basic information too.
Brent S.


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