TRUSTS VS LLC, S-CORP, C-CORP A trust requires someone trustworthy to manage it:

TRUSTS VS LLC, S-CORP, C-CORP
A trust requires someone trustworthy to manage it: a trustee. This is the only ‘risk’.
If a trustee steals from a trust it is a crime and prosecutable.
A trust may operate for financial gain.
A trust main hold a corporation as an asset.
A trust is taxed like an individual taxpayer.
A group of people or families can essentially contribute assets to a trust to protect them.
If assets are placed in an irrevocable trust before marriage, then they are insulated from spousal seizure during divorce proceedings – if specified in the trust. (Some people might want those assets to go to a spouse at death for example.)
Beneficiaries can leverage assets in trust for the purpose of credit.
Even Houses can be placed into trust.
If a trust does not distribute income, it pays tax at the rate of the total income from the trust. A trust can distribute income and individuals pay tax according to the tax rate of the individual parties, and as such not force all parties to pay the tax rate of the aggregate income of the trust.

Basic Benefits:
1) asset protection.
2) probate evasion and intergenerational transfer.

Limits Too Benefits:
1) If a beneficiary has too much control over the trust (such as a self-settled trust where the grantor is also a beneficiary), creditors may argue that the assets should be available to satisfy the beneficiary’s debts.
2) Alimony and Child Support: Courts may order distributions from a trust to satisfy alimony, child support, or other family law obligations, particularly if the trust was funded by the grantor.
3) Piercing the Trust Veil: In some cases, courts may “pierce the trust veil” if they determine that the trust is essentially a sham or an alter ego of the grantor, meaning it is not being used for legitimate asset protection or estate planning purposes.

So, effectively, joining a large scale trust is equivalent to joining a medieval monastery. Which is fascinating. 😉

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