Business Trust

A business trust is an unincorporated business organization created by a legal document, a declaration of trust, and is used in place of a corporation or partnership for the transaction of various kinds of business with limited liability.

A business trust is much like a traditional trust because its trustees have legal title/rights to the trust property to administer for the advantage of its beneficiaries who hold equitable title/rights to it. The declaration of the trust specifies its terms, duration, powers and duties of the trustees as well as the interests of the beneficiaries. The beneficiaries receive certificates of beneficial interest as evidence of their interest in the trust which is transferable.

The property of a business trust is managed and controlled by trustees who have a fiduciary duty to the beneficiaries to act in their best interests.

Profits and losses from the use and/or investment of the trust property are shared by the beneficiaries according to their interests in the trust.

Trustee Obligations

The trustee is obligated by law to use a high standard of care and prudence in the investment of funds held by the trust. If real property is held in trust, it is the trustee's obligation to supervise and care for the property. When economic and other reasons indicate the need to shift trust assets to safer areas of investment, it becomes the duty of the trustee to make such changes. If investments selected by the trustee fail, the trustee is held liable unless a court rules that the action was taken with prudence and caution.

The trustee relationship is one of great and continuing responsibility. Appointment as a trustee should not be accepted by those without the knowledge and background that would afford prudent and good management.

What is a trust?

A Trust is a legal device and is a separate legal entity by which property is held by one person (the trustee) for the benefit of another (the beneficiary). The person who sets up the trust is called the settlor. The property that is held in trust is the corpus, or trust fund.

 

When a trust is established, title is split between the trustee, who holds legal title, and the beneficiary, who holds equitable or beneficial title. This separation allows the trustee to manage the trust property for the benefit of the beneficiary. Trusts are established to save taxes, gain privacy, provide the needs of young children, and prevent money from being squandered, among many other reasons.

 

Property is often placed in trust so that it will be preserved for future generations. In such cases, only the income is given out during the life of the trust, with the principal held in relatively safe investments. The rule against perpetuities prevents trusts (except charitable organizations/trusts) from lasting indefinitely. This rule in many states requires trust property to become owned by the beneficiary outright not later than 21 years after the death of some person alive at the creation of the trust.

The law relating to trusts has its origins in medieval England and has evolved over a period of several centuries to become one of the most effective tax and estate planning techniques available.

HOME

I came into the knowledge of trusts after I lost all of my business assets in a forced bankruptcy. I had a false belief that the assets of the business were protected under an LLC and it was when I discovered my mistakes that I sought out the assistance of a professional to learn how to first, protect myself personally along with my personal assets, and second, rebuild my business, protect it and its assets.

Making several appointments with local attorneys, I set out to create a plan to protect what was left of my "estate" and I was consistently being told to create a will. I would ask what the heaven a will would do for me RIGHT NOW seeing as I am alive and in need of help RIGHT NOW. How is this ASSET PROTECTION RIGHT NOW???

Finally, one attorney who was smart enough to see that I had already heard a bunch of nonsense told me to do something for myself. Having already been informed that I was a student, he told me to change what I was studying and begin to learn about trusts. He said, "my dear young lady, you have been intelligent enough to plan and run a lucrative business all while being a single mother so I would say that you are intelligent enough to accept the truth about what has just happened to you. For starters, you have been conducting your business and your life affairs ALL WRONG! I can type your name in on the internet and find out EVERYTHING about you. Where you live, what you drive, where you have been all of your life and the list goes on. Do you want to continue to live like an open book and continue to be devoured by vultures?" Before I could reply he slapped 3 big books down in front of me and told me to take them home and call him the following Thursday so we could have another meeting. He then referred me to his buddy of 30 years whom he referred to as "the numbers guy". He said "this is the gentleman who will help you keep what ever finances you have left."

Amazingly enough, I was mentored by an accountant who literally "showed me the ropes". I quickly began to see how everything, and I mean everything, is a trust. I changed my course of study, became a paralegal with a vigorous focus on trusts and estates, and the rest is history.

 

508 Trust

A 508 trust is an EXEMPT ORGANIZATION and is described as a "New Organization" under the IRS code 508 (a) which states that New Organizations must notify the secretary that they are applying for recognition of 501 (c) (3) status EXCEPT as provided in Subsection (c). Found in Code 508 (c) (1), Exceptions- mandatory exceptions- subsection (a), shall not apply to - (a) churches, their integrated auxiliaries, and conventions or associations of churches.

Thus, the 508 is a MINISTRY, church, spiritual organization, which ever you choose to call it as it is merely a religious or spiritual establishment consisting of two or more people. There is no need to have a building or conduct any type of service or ceremony and the best part is that the church/ministry or an auxiliary DOES NOT NEED to be a 501 (c) (3) charity organization in order to be exempt. You can CHOOSE to be a 508, which is also exempt even if it doesn't file for exempt recognition.

THERE IS NO TAX FILING REQUIREMENTS. IRS code 6033 (a) exempts religious organizations from the need for filing returns of ANY KIND.

 

 

 

 

Banking Trust

Opening an interest free checking account under your trust is one of the best ways to become INVISIBLE!! You no longer have a need to have anything in your own name and it is safe from predators, garnishments, liens and levies.

Qtip Trust

This type of trust is often used in second marriages where children are involved, a QTIP trust allows the creator of the trust to determine where his or her assets will ultimately go after the second spouse dies.