do I need to set up a trust? If so, what type?

UPDATED: Sep 30, 2022

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do I need to set up a trust? If so, what type?

I own my primary residence and am purchasing a four unit income property. I would like to protect my assets against any potential lawsuits in the future and would like to maximize my tax benefits. Is setting up a trust right for me? If so, which type of trust would be right for my situation?

Asked on June 12, 2017 under Estate Planning, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

This is an enormously complicated question: you need to consult with a trusts and estates attorney about your situation and needs, to see if a trust is right for you. One thing to consider: the most protection comes from an "irrevocable" trust--one you cannot change or undo. That means you will be permanently giving  your property to the trust and giving up some (or even most, depending on the trust) control over it. That is a drastic step. If you are worried most about liability protection, a less drastic step, like having the property be owned by an LLC you own, may be better, since that is much less irrevocable. However, again, you should discuss your needs and concerns with an attorney in detail, who can advise you as to the best course of action.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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