Strengthen Your Asset Protection By Using a Third-Party Distribution Trustee
Many trusts are constructed to allow for self-management and various levels of control by the trust grantor. In many cases, the governing trust document may require an independent trustee to hold discretionary power regarding distributions to preserve the asset protection attributes of a trust.
Enhance your asset protection while creating less responsibility for your beneficiary
Asset protection through naming an independent distribution trustee functions by protecting your inheritance from your beneficiaries’ creditors.
Moreover, depending on your trust, utilizing an independent trustee removes some of the inherent responsibilities carried by your beneficiary. Thus, the advantages of designating a distribution trustee are two fold: you increase your asset protection while unburdening your beneficiary with solely managing your trust.
A hybrid option that is gaining popularity is to bifurcate your trustee’s duties into two roles: administration and distribution.
Your beneficiary is named as the trustee and may adequately manage the assets in trust. The third-party distribution trustee, however, must authorize the distribution decisions proposed by your beneficiary in writing.
While the distribution trustee will likely authorize the requests of the beneficiary for normal circumstances, when creditor claims arise, the distribution trustee may refuse authorization. The trust assets are therefore protected from creditor claims.
Alliance Trust Company of Nevada provides Distribution Trustee services and other limited duty trustee functions.
You have many options when it comes to estate planning. Alliance Trust Companies of Nevada works with a network of attorneys specializing in asset protection. We are happy to assist you.