One way to cover your assets when creditors come knocking
Asset-protection trusts, which allow executives and business owners to put personal assets where creditors can't get to them, hardly constitute a new idea. But the trusts are becoming increasingly available-and somewhat less costly-of late. In 2003, Utah became the fifth U.S. state to open its financial institutions to the trusts. (Alaska, Delaware, Nevada and Rhode Island are the others.) Traditionally, you had to work through offshore tax havens to create the trusts. No more.
Wherever you open them, the idea is to put your money where creditors can't get their hands on it in the case of a legal judgment or a bankruptcy filing. You accomplish that, in short, by putting some portion of your assets into an irrevocable trust. It has to be run by an independent trustee who can elect to give you payments from time to time but can't put you on a fixed, regular schedule.
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