What are self-settled trusts?

Self-settled trusts are trusts that are set up by the same person who will be the beneficiary of the trust. This type of trust is also known as an “asset protection trust.” In Florida, self-settled trusts are used to protect assets from creditors. This type of trust is beneficial for individuals who are facing potential lawsuit settlements or creditor judgments, as the assets placed in the trust are no longer considered the individual’s property and are thus out of reach of creditors. Self-settled trusts are set up by transferring title of the asset to the trust, thereby placing it in the trust. The person who establishes the trust is the settlor, also known as the grantor of the trust. This person also names beneficiaries for the trust, which includes themselves. A trustee is also appointed to manage the trust assets and handle the settlement of distributions to the grantor and beneficiaries. In Florida, self-settled trusts are ideal for protecting assets from creditors. The trust law in this state is favorable to asset protection and allows some degree of protection from creditors if all the requirements and conditions are met. This includes having the trust established before any creditors become involved and properly transferring any assets to the trust. It should be noted, however, that self-settled trusts may not be effective against certain creditors and are not a guarantee of protection from all creditors.

Related FAQs

What are the benefits of asset protection planning?
How do I establish an asset protection trust?
What is an inter vivos trust?
What is the Uniform Fraudulent Transfer Act (UFTA)?
Is it legal to use asset protection strategies?
What are the specific steps of asset protection planning?
Can a domestic asset protection trust be used to protect assets from creditors?
What is the best jurisdiction for an offshore asset protection trust?
What is a business entity?
What is an offshore asset protection trust?

What are self-settled trusts?

Related FAQs

Related Blog Posts