Donald Trump’s creditors and those currently involved in lawsuits against him may be celebrating. Trump was in the news again this morning for changes made to the trust that holds and controls his business interests.
According to new reports, changes were made to Trump’s trust in February, shortly after the inauguration. Based on news reports and analysis by legal scholars, the Trump trust never was a “blind trust” in the truest sense, but that’s not what caught my eye.
As an asset protection lawyer what really popped out at me was this:
The new clause specifically states that the trustees “shall distribute” net income or principal to Donald J. Trump at his request.
The word “shall” creates a serious problem for any beneficiary or grantor of any trust that has creditor protection concerns. It means that they must make the distributions if he asks, and creditors, through the courts could force him to ask. Since the trust, the beneficiary and trustees are all domestic, they’d likely have the jurisdiction required to do so to enforce or collect on a domestic U.S. judgement.
Most experienced asset protection lawyers would use some of the same intentionally broad terms apparently used in Trump’s trust about maintenance and support and medical expenses and etc., but we would also almost NEVER use the word “shall”. Instead, we would make all trust distributions completely “discretionary”. That means the trustees decide what you get, when you get it and most importantly IF YOU GET anything at all. They have the power to not make a distribution, which would protect the trust’s assets from most unrelated claims.
Details this small make a big, life changing difference in some cases. Make sure your legal counsel is up to the task and appropriately experienced.
Here’s how to find the right help: How to Pick the Best Asset Protection Lawyer
Ike Devji, J.D.