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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 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.


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