Trusts can do some amazing things. They can allow someone to control the distribution of assets long after they have passed away. They can segregate assets from an estate, allowing the maximization of estate tax exemptions and a minimization of estate tax liability. They can also serve to protect a beneficiary from him or herself by providing spendthrift protection.

A spendthrift trust allows a trustee to manage assets placed in a trust for the benefit of a beneficiary according to the terms of the trust document. Typically a trust will allow the trustee to make distributions for expenses related to a beneficiary’s health, support, education, and maintenance, though this standard could be loosened or tightened depending on the circumstances under which the trust was created. If a beneficiary is sued or otherwise pursued by creditors, the trustee need not make further discretionary distributions to the beneficiary, thereby preserving the trust assets.

There is a catch, however. Only sixteen states allow for the creation of self-settled spendthrift trusts, and Minnesota is not one of them. A self-settled trust is a trust created by a person for his or her own benefit in the hopes of creating a barrier between the person and creditors. If the creator of the trust is sued, the creditors are unable to reach the trust assets.

Even when a state allows for self-settled spendthrift trusts, there are strict requirements. South Dakota’s self-settled trust laws require, among other things, a trustee to be located in South Dakota permanently. That means that the person or entity managing the trust typically has to be a South Dakota resident — for this reason, a professional trust company is generally hired to act as the trustee. The trust must be governed by South Dakota law, so it will typically be drafted by a South Dakota attorney. Some of the trust property must be located in South Dakota, and any transfer to the trust must not be fraudulent and has a two-year statute of limitations (meaning if the person creating the trust is sued during the first two years, the assets are not protected).

The creating of any trust is a job for a professional. If you have questions about trust planning, speak to a qualified trust attorney.

Join Attorney Philip J. Ruce in this ongoing video series as he briefly discusses frequently asked questions in estate and trust planning.

Today, Philip discusses how to make sure your personal property (such as the things in your home) go to the right people at the right time.

Do I Even Need A Will?

Join Attorney Philip J. Ruce in this ongoing video series as he briefly discusses frequently asked questions in estate and trust planning.

Today, Philip discusses whether a will is even a necessary part of your plan.

Attorney Philip J. Ruce has been awarded the Super Lawyers Rising Star designation for 2016.

Ssuperlawyerbadgeuper Lawyers is a Thompson Reuters publication which rates “lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.” Their “patented selection process includes independent research, peer nominations and peer evaluations.”

Five percent of practicing attorneys are awarded the Super Lawyers designation annually. The Rising Star designation is awarded to only two-and-a-half percent of attorneys who are forty years of age or younger or have been in practice for less than ten years.

Philip has been an advocate for many Minnesota families; receiving this honor has been an affirmation of his dedication to his clients, his peers, and his field of law.

The cornerstone of Philip’s practice is a deep respect for his clients’ desire to accomplish their goals — without wondering if their attorney shares their priorities. Philip truly believes it is your family and your legacy; hire an attorney who is as committed to your dreams as you are.

Philip’s commitment to the estate planning field goes beyond his work as a legal representative and client advocate. As a former professional trustee, he has worked on thousands of trusts and estates. Philip is a published academic and the author of “Trustee University: The Guidebook to Best Practices for Family Trustees.” His research on trustee and fiduciary duties has been published at universities around the country and as well as the American Bar Association’s legal journal for trust and probate law. Philip is an adjunct professor of law at Thomas Jefferson School of Law.

More information on Super Lawyers can be found here.

creates wills and trusts for families who want to feel secure that their loved ones are cared-for. Philip is a trust and estate attorney based in Minneapolis, Minnesota. Philip is the author of Trustee University: The Guidebook to Best Practices for Family Trustees, available at Amazon.com in paperback or Kindle edition (free chapter available here!). He also works with trustees and beneficiaries who need help with their trusts. You can contact him here.

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