Asset Protection Trusts Protect the Assets: But What About the Trustees?
Erin C. V. Bailey
58 PROBATE & PROPERTY � JANUARY/FEBRUARY 2007 The orthodox rule is that trusts are not legal entities that can be sued in their own right. This reality traditionally forced claimants to sue the trustee in its personal capacitty compelling the trustee to then seek reimbursement (indemnification) from trust assets for any resulting personal liability. Asset protection trusts purpoor to protect a settlor’s assets from creditors—good news for the settlor but potentially bad news if the unwary trustee...