Asset protection
It is often thought that asset protection has the effect of rendering the asset ‘immune’ to attachment or the claims of creditors. This is not quite correct, in that it is all but impossible to make an asset which is essentially under your control ‘bullet proof’ against the claim of a tenacious and determined creditor.
By transferring an asset into your trust, you are effectively making it very difficult for a creditor to pursue any such asset. Invariably, taking the step of transferring the asset to your trust will make the pursuit of such asset procedurally, extremely difficult for anyone other than the most dogged of creditors.
There is nothing unlawful about formulating a comprehensive asset protection plan, its ultimate aim being to remove you from the direct personal control of the asset, whilst nonetheless retaining your control over it and beneficial enjoyment of it.
This does not mean, however, that you can simply register a trust over which you yourself have absolute control, and in respect of which you are also a beneficiary. In such circumstances, the trust will immediately be perceived as nothing other than an alter ego to yourself, and the relative protection which the trust would otherwise give you will fall away. This can, however, be catered for through the appointment of , for example, family members or close personal friends, colleagues or business associates as co-trustees, all sharing the common desire to preserve the trust asset.
Of one thing there is no doubt, it would be far preferable to place ownership and control of an important asset with a trust, rather than run the risk of losing the asset in your own hands for having failed to do so.