The Complete Breakdown of Using Personal Property Trusts
In this episode of Coffee with Carl, attorney Carl Zoellner guides you through the process of using personal property trusts.
Have trust issues?
I get it.
And when it comes to Personal property trusts, there are a few things you need to know. Let’s dive in.
We tend to label our trusts for what we intend them to do. Personal property trust tends to hold things that aren’t real property or not real estate.
For a lot of our clients we’ll use personal property trusts to hold things like brokerage accounts. If you’re doing some day trading and your brokerage house has given you a hard time about having that account held directly in an LLC with those live data feeds, a personal property trust could be an effective workaround.
Say you have some existing business entities that you’d like to extend a little more anonymity across, we can use a personal property trust or a series of personal property trusts to obscure single ownership of those entities as well.
One thing that’s key is personal property trusts do not directly hold title to real estate, we use them for personal property and they’re drafted as such.
The land trust documentation we may use will be different from your personal property trust documentation, also different from your living trust, right.
Your living trust is intended for your estate plan. So all those documents are going to be different from each other. But I wanted to spend a little bit of time on the personal property trust, just because there have been some additional questions.
With a personal property trust, like any of the grantor trusts we have, there’s a grantor who is the person that’s putting the property into the trust. However, the trustee that usually is the titled owner of the asset acts as more of a manager for those assets.
And then you have the beneficiary. In most cases, for most of our trusts, except for a living trust, usually the beneficiary will be a business entity because the type of asset protection you can expect for the assets held in a trust directly correlates with who or what the beneficiary is.
For our land trusts and our personal property trust, the beneficiary or I should say the final beneficiary is generally going to be a business entity. Considering that, the personal property trust is a great tool that’s out there.
It’s not appropriate for every transaction. There can be a nominee trustee for a personal property trust too. We just want to look at it to make sure it’s appropriate and you’re not giving up all of your ease of use by doing it.
So until next time, thank you everyone for joining me with another episode of Coffee with Carl, here we like to keep them short.
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