What is a personal property trust?
A personal property trust is a living trust that holds title to personal property, e.g., any other property that’s not real estate. In a personal property trust, the Grantor (the person who created the trust and owns the personal property) transfers legal ownership of personal property to the Trustee who must hold and manage those assets for the benefit of the Beneficiary. A personal property trust is a self-directed trust – the Grantor and the Beneficiary are one and the same. Therefore, even though the Grantor transfers legal ownership of the personal property to the trust, he or she can still maintain complete control over the personal property while also enjoying anonymity.
What is a personal property trust used for?
A personal property trust allows the owner of the personal property to keep his or her ownership information private. When personal property must be publicly recorded, rather than the owner listing his name, the personal property can be recorded as being owned by the trust. Remember, a trust can be titled however the grantor wants; there is no obligation to use the grantor’s name.
What are the benefits of a personal property trust?
As mentioned, anonymity is the primary benefit of creating a personal property trust. This allows the owner to protect the assets from lawsuits and creditors. Personal property trusts, like all trusts, avoid probate, which can be time-consuming and expensive. There is also a lot of flexibility in the types of personal property that can be placed in a personal property trust, and the owner can retain control over the trust property without actually “owning” the trust property.
What assets are usually placed in a personal property trust?
- Mortgages
- LLCs
- Vehicles
- Family heirlooms, pieces of artwork
Should I have a personal property trust?
If you want to maintain control of your own personal property without recording that ownership within the public domain, a personal property trust may be right for you. There are many types of trusts (e.g. charitable remainder trusts, family trusts) to consider. Contact an experienced estate planning attorney today to discuss your options and determine if a personal property trust fits your estate planning needs.
