Can a house, car, some stock, and a 401k be put into a trust?
Full Question:
Answer:
An asset protection trust is a type of trust that is designed to protect a person's assets from claims of future creditors. These types of trusts are often set up in countries outside of the United States, although the assets do not always need to be transferred to the foreign jurisdiction. The purpose of an asset protection trust is to protect assets from creditors.
These trusts are typically restricted by being irrevocable for a number of years and not allowing the trustmaker to benefit from the trust. Typically, any undistributed assets of the trust are returned to the trustmaker upon termination of the trust. The asset protection trust is basically a trust containing a spendthrift clause preventing a trust beneficiary from alienating his or her expected interest in favor of a creditor.
If a person could benefit from the trust being established, this could be a reason to challenge the asset protection trust. If the trust is created with knowledge of an impending claim, it is possible the trust could be challenged as a fraudulent conveyance. For example, creating a trust right before filing bankruptcy may throw up red flags for examination.
Homestead laws allow an individual to register a portion of his real and personal property as "homestead," thereby making that portion of the individual's estate off-limits to most creditors.