Asset Protection North Dakota Trusts
July 7, 2004
By Monish Datta
Asset Protection is the process of taking steps to
minimize the risk of creditors or other claimants
from being able to reach your assets. This can include
setting up a different entity, such as an LLC, for
each property, business, North Dakota Trusts etc.
Thus, if one particular property is subject to a
suit (e.g., a tenant is hurt on one rental property)
the claimant will be limited to the assets from that
particular property or entity. This can prevent a
domino effect against your other assets. Asset Protection
North Dakota Trusts involves the setting up of a trust
in the state of North Dakota.
A trust is a form of property ownership under which the benefits
of owning property -- real or personal (tangible or intangible)
-- are separated from the responsibilities of ownership. Put another
way, it is an arrangement whereby someone holds legal title to and
manages property for the benefit of someone else.
A trust is an artificial being, generally created by a written
document or instrument. Although not recommended, a person can create
an oral, non-written trust for personal property simply by declaring
that the property is being held in trust for the benefit of someone.
Trusts involving real property or that are created by will must
have written instructions, however.
Trusts require five basic elements -- a grantor, a trust instrument,
a trustee, property for the trust to manage, and beneficiaries.
The grantor is the person setting up the trust. This person is sometimes
referred to as the settlor or trustor
The trust instrument is a set of instructions that specifies the
rules of operation of the trust, the powers of the trustee (the
person or firm managing the trust), and how the beneficiaries will
share the income generated by the trust and the principal remaining
at the time of ultimate distribution of the property
The trustee receives the property, invests capital if necessary,
collects the income, handles the accounting, pays taxes due and
reinvests or distributes income according to the rules laid down
by the trust
There are numerous trust provisions or specific trusts that may
help individuals and families reach their estate planning objectives.
These include marital trusts (such as qualified terminable interest
property trusts or QTIP trusts, power of appointment trusts, and
estate trusts), nonmarital trusts, Medicaid trusts, qualified domestic
trusts, and others.
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