I helped a man from Plano, Texas today. He was in our office and wanted to know how Trusts work. I gave him a quick demonstration using a little red wagon that I keep in our conference room. The wagon represents the Trust entity itself. I have several matchbooks that represent a family’s assets (house, car, bank accounts, savings accounts, etc.). I placed the matchbooks inside the wagon (to represent the re-titling and trust ownership of the assets) and rolled it around the conference room floor to emphasize the mobility and portability of the Trust. I explained that as long as the assets are inside the trust, they are protected from predators like lawsuits, Probate and the claims of Nursing Homes. Then I took some of the matchbooks out of the wagon and placed them on the table to demonstrate how the owner maintains control over the assets. I also indicated, though, that once the matchbooks (assets) were outside of the wagon, they were no longer protected from lawsuits, probate and Nursing Homes. In the bed of the wagon is a set of instructions that lets everyone know how the trust is to be operated. I closed my demonstration by explaining to my newest client that trusts aren’t just for the rich anymore. They are for anyone that wants to protect assets for their families.
That’s a very simple explanation of Trusts. They can be very complicated but the basics remain the same: protection and control of family assets.