How do I establish an asset protection trust?

In South Carolina, an asset protection trust is established by signing a trust document in the presence of a notary. This document details the terms and conditions of the trust and is filed with the South Carolina Department of Revenue. The trust document identifies the trustor, or the individual who sets up the trust, as well as the trustee, or the individual who will manage the trust assets. The trustee must be a South Carolina resident or have a South Carolina business address. To protect assets from creditors, the trustor must transfer assets into the trust. This type of transfer is known as a "non-grantor" transfer, and is generally subject to income tax. The trustor also has the option to create a "grantor" trust, where he or she maintains control over the trust assets and is responsible for all taxes due on the assets. The trust must be funded with a minimum of $25,000. After the initial funding, the trust can be funded with additional assets, such as real estate, stocks, bonds, or other investments. All assets should be titled in the name of the trust and managed by the trustee. The trustor may make "distributions," or disbursements, from the trust, but they must adhere to the terms of the trust document. The trustor may designate beneficiaries to receive the trust assets after his or her death. The trustor can also specify who may or may not have access to the trust assets, and can specify that the trust assets be used only for particular purposes. Asset protection trusts can provide an added layer of security for assets while still allowing the trustor to maintain some control over the assets. These trusts can also help protect assets from creditors, and can provide peace of mind to those seeking an added layer of protection for their assets.

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