If you are the only person in charge of your trust, a judge can order you to hand over the trust assets to your creditors.
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 and Shreya Ley here. We are the owners of LayRoots, an asset protection law firm.
Yes.
Yesterday or the day before–
Yeah, it was a couple days ago, let’s say.
… and other times in our lives we have–
So many other times.
Been talking about how asset protection, higher levels of asset protection, you can’t do it alone. It can’t be done alone.
But why, Colin?
You need a team, so let’s talk about that.
Yeah, let’s do it.
Why…
So the question is why can’t I be the only person in charge of my asset protection trust?
Yeah, why do I have to have other people involved, all up in my business?
Look, the main thing is, when you are talking about having an independent trustee —
Yes.
be involved in your asset protection trust —
Uh huh
… maybe you start out as the person in control of your trust, but you have to have that independent person there in case you get into some sort of, legal troubles.
Yes.
Perhaps it’s needed and —
Well that’s the whole reason why you’re getting this asset protection trust, right? Is to prepare for the worst.
The worst.
Yes, prepare for the worst.
So, what happens if you do get into some sort of legal trouble, the person who controls the trust can be told, what to do by a judge, by a court.
Mm-hm.
So if you are the only person who is in control of the trust you have the ability to take assets out of the trust.
And to do comply with what the judge has told you to do.
Yes, so if a judge —
For the benefit of those creditors.
So if a judge tells you to take all of the assets out of your trust, you will have to do it. You could chose not to, and then you could go to jail. Or, you follow the order and you take the assets out of your trust. Now, if you have an independent trustee in place, who is not bound to follow the rulings and orders of a U.S. court, then if the judge makes that demand that assets come out of the trust, that trustee is not obligated to do it.
Right and if the judge tells you, “Hey, take those assets out of the trust.” Then say, “Sorry, this trustee is in charge.”
“I do not control the trust.” I will tell that trustee to take stuff out, but as long as it’s set up right, that trustee does not have to listen to you.
Mm-hmm
So if you’re the only person who is in control of the trust, you have the ability to take assets out of trust under order —
Yeah
… of the judge.
Well I think the point is, that if you’re the only one in charge, then you are also the only one with responsibility and liability there. So…
No one to turn to.
Nobody to turn to to help you out.
And that would be a shame.
Mm-hmm.
And that would defeat the whole purpose of setting up an asset protection trust.
Yeah.
You can’t do it alone.
