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A trust for holding assets can have several benefits. One of them is the protection of assets against creditors. Another is the reduction of taxes. Yet another is the protection of privacy of the trustor and beneficiaries. All of these goals are interrelated and all of them are important. One very important trust policy, an aspect of the general practice of asset protection attorneys for the past several hundred years, is flat wrong. Here is why.
What’s in a name?
The name that is given to your trust, and to a lesser extent the trustees selected to manage the trust assets, are the main way that the trust protects privacy. Privacy protection is one of the three co-equal prongs of benefits that trusts provide. The trust policy, custom, habit and practice of almost all asset protection attorneys is to name the trust after the family or individual creating it. This completely destroys the entire privacy prong of trust benefits. What is worse, the cost to select an anonymous name is exactly the same as the cost to name the trust after yourself; ZERO!
Trust Policy: Putting Your Name All Over Everything
Maybe some lawyers are just like a little kid first learning how to write their name, instead they write your name all over all of your stuff. Naming the trust after yourself or your family connects you to the trust assets. A search through public property records for your name will also reveal the name of your trust, and expose you to the frivolous lawsuits, identity theft, stalking, harassment, kidnapping, and punitive damage awards that may come with having your assets public. So will a revelation that an asset belongs to a trust with a name eerily similar to yours. All of the business dealings that are done in the name of a namesake trust will betray your involvement to all who can inquire. Your namesake trust prevents you from being a truly silent partner.
Trust Policy You Can Trust
The easiest thing to do is to select a name that has nothing to do with you. Use names like the Jimi Hendrix Experience Family Trust, the 1981 Los Angeles Dodgers Family Trust, or some other owner obscuring name. Another important, but more difficult step, is to select a trustee to manage the trust that does not share your name. This can be difficult because you may need to relinquish some control to another person. Arrangements can be made so that the trustee will only act under explicit written instructions from the beneficiary, but this can be cumbersome and expensive. If you don’t want to relinquish control of your trust assets, you can choose to have a New Mexico LLC or some other offshore LLC where the managing members are not a matter of public record act as the trustee. This increases the costs slightly, but your name will not appear anywhere in any property ownership public record in relation to the trust.
Conclusion
Please, please, please, do not name your trust after your own name. Have your attorney use a name that keeps you anonymous in relation to the trust. Using these trusts as outline in the book How To Vanish, your trust will actually protect your privacy. There is almost no logical reason not to.
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- Living Trusts Protect Financial Privacy
- Keep Your Home Address To Yourself
- New Mexico LLCs, Effective Asset Protection?
- Offshore Asset Protection Trusts And Better Privacy
- Keep Your Assets Hidden In Plain Sight
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