Legal Question in Wills and Trusts in California

A living trust can avoid a law suit?

After you funded your living trust with your house, it is now the trust is the one that actually ''owns'' the property,managed by you, as a trustee. If for some reasons you get sued, it that true that the property is protected? Since it is not under your name, you no longer own it. It is under the trust's name.

Is that true?


Asked on 7/05/04, 11:45 pm

3 Answers from Attorneys

Ken Koenen Koenen & Tokunaga, P.C.

Re: A living trust can avoid a law suit?

No, that is not correct. If the trust is revocable, which most living trusts are, it is assumed that you are still the owner. You would need to put property into a irrevocable trust or some other device for asset protection. Of course, if you are already anticipating a claim against you, transferring assets for less than adequate consideration could be in violation of the fraudulent transfer act.

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Answered on 7/06/04, 11:53 am
Mona Montgomery Mona Montgomery, Attorney at law

Re: A living trust can avoid a law suit?

If you are the Settlor, or Trustor, then your personal assets are not protected from claims made against property in your living trust. If you are merely the Trustee, then you have no liability unless it can be proven that you have breached your ethical duties.

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Answered on 7/06/04, 12:47 pm
Chris Johnson Christopher B. Johnson, Attorney at Law

Re: A living trust can avoid a law suit?

If the trust is for you, and is revocable, which is usually the case, the assets have no more protection than they would outside the trust. If you're concerned about asset protection, speak with an attorney about some options (and what not to do). The simplest and cheapest form of asset protection (against lawsuits for negligence against you) is usually an umbrella insurance policy.

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Answered on 7/06/04, 2:31 pm


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