Thursday, October 29, 2009

Trusts from The Times

On closer reading, trusts popped up in a couple of places in the NYT Wealth and Personal Finance section (see post below). Buried deep in Running Scared is this trust note:
Delaware asset protection trusts […] allow people to shield money from creditors after the assets have been in the trust for four years.

When these trusts were created in 1997, doctors, lawyers and accountants were drawn to them because they feared their liability insurance would not cover them fully. Today, people starting hedge funds and private equity firms are interested, said Dan Lindley, president of the Northern Trust Company of Delaware. “They say, ‘I want to put some of my assets into this trust and have that be my rainy day fund if the fund performs badly and investors turn on me,’ ” he said.

This may be hiding money from creditors, but Delaware law permits it so long as the person was unaware of any claims against him when he set up the trust.
A full-page ad from the US Trust brand at BofA offers a pdf of Not Your Grandfather's Trust. Behind the booklet's cryptic title lurks a brisk discussion of two-year GRATs and how multiple Grantor Retained Annuity Trusts may be designed, sequenced and invested.

No comments: