Is there anyone who set up a Non-Grantor, Irrevocable, Complex, Discretionary, Spendthrift Trust? If so, how is it in actual practicality of operations when it comes to buying rental real estate and at some point selling it from the trust. Seriously considering this asset protection strategy but wanted to see if anyone of you has any experience with it?
Is there anyone who set up a Non-Grantor, Irrevocable, Complex, Discretionary, Spendthrift Trust? If so, how is it in actual practicality of operations when it comes to buying rental real estate and at some point selling it from the trust. Seriously considering this asset protection strategy but wanted to see if anyone of you has any experience with it?
If the trust does not have a grantor, then who is putting the asset into the trust?
Who is the trustee, and what discretion does he have?
@john Clark From what I understand the grantor removes themself via contract from any control or benefit from the trust. I’ve read through a contract that did it this way and then the trustee has full power, authority, discretion of the trust in benefit Of the listed beneficiary. I’ve only spoken to a couple folks who have this, and was looking for more knowledge from those who may be utilizing this type of trust via contract law it is not statutory. My intention is to gain a broader view of whether it was for me or not in my real estate journey.
@john Clark From what I understand the grantor removes themself via contract from any control or benefit from the trust. I’ve read through a contract that did it this way and then the trustee has full power, authority, discretion of the trust in benefit Of the listed beneficiary. I’ve only spoken to a couple folks who have this, and was looking for more knowledge from those who may be utilizing this type of trust via contract law it is not statutory. My intention is to gain a broader view of whether it was for me or not in my real estate journey.
Now I understand your terminology. Then there's the question of what guidance does the trustee have, and what is the relationship between the grantor and grantee, and also the trustee and the grantee.
You cannot make yourself the beneficiary of a spendthrift trust where you are also the grantor, or even the trustee.
@john Clark You are correct you cannot be the grantor and the trustee and the beneficiary . The grantor I suppose can be whoever you hired to facilitate/structure the trust. The beneficiary would be your family, I.e a child or whoever the trust is essentially for at the end of day, and the trustee yourself.
@john Clark You are correct you cannot be the grantor and the trustee and the beneficiary . The grantor I suppose can be whoever you hired to facilitate/structure the trust. The beneficiary would be your family, I.e a child or whoever the trust is essentially for at the end of day, and the trustee yourself.
No. The grantor is the person who puts the asset into the trust.
The grantor determines the structure of the trust.
The trustee simply administers the trust.
sometimes the grantor can be a beneficiary.
where you throw me is where you say you want a spendthrift trust. Spendthrift trusts are not favored in the law. You need to see a good attorney.
@john Clark this is why I posted to get insights from those who know these type Of trusts or may be utilizing them. I am still trying to understand the full scope of them myself, hence the post :)
Is there anyone who set up a Non-Grantor, Irrevocable, Complex, Discretionary, Spendthrift Trust? If so, how is it in actual practicality of operations when it comes to buying rental real estate and at some point selling it from the trust. Seriously considering this asset protection strategy but wanted to see if anyone of you has any experience with it?
I have a few non-grantor spend thrift trusts. The practicality of this structure is dependent of the lexicon in the spendthrift provision.
In other words the language guiding the spend thrift clause within your trust agreement lets you know how useful this structure is for you.
@Amleh quawain thank you for your input, any way you could expand more on how these trusts have assisted you? I am looking for asset protection/estate planning/rental real estate owning as my foundation for wanting to learn and perhaps use this style of trust. I live in CA so multiple LLC options are not really a possibility due to CA fees per LLC. So i am looking spendthrift trusts as a capture all. Any expanded input from your personal use of these in real estate world would be very appreciated :)
Get a good attorney familiar with tax laws and they can explain better to you. Those terms that you are using all have very technical tax meanings under the law. Be careful about scams. If it sounds too good to be true, probably it is. Most states do not provide creditor protection for self-settled trusts.
*This post does not create an attorney-client or CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
@kate balatbat thank you for your valued input. Yes there are a lot of things to consider and scams for sure out there. This trust is being sold/facilitated by a family friend who basically is the middle man between you and the law firm generating the trust. Its being used by another family friend but no one is actively buying real estate through it so was looking for anyone that was. Thank you for your response:)
CPA| New Clients Welcome| 50 States · Member since 2016 · 435 posts · 93 votes
10mo
@Tiffany Maloch, hi. Great question, that structure can work, but in practice it gets more complex than “just put it in a trust and you are done.”
You have to look at: who’s the trustee, how distributions are handled, how the trust is taxed (non-grantor rules), and how financing/title is handled when you buy/sell from the trust.
I can point you in the right direction of a trust/estate lawyer who works with real estate so you can see the legal side.