Can You Protect Stocks in a Family Trust?

Q. Can I put my stocks into a family trust account to protect them from creditors or legal suits?  I have accumulated these stocks for retirement but would like to have some control over them.

A. Yes, you can set up and use a trust for almost any purpose, including holding only your stocks and bonds. However, if you are trying to get liability and asset protection you may be better off to hold your investments in a different entity.  Depending on the state you live in, I would recommend a multi member LLC. Trusts generally (unless they are irrevocable trust) will NOT give you any asset protection. The most you get is a little anonymity.   Most people get a living trust to avoid probate.  Beware that only those properties held in the trust avoid probate.  So if you decide to open an LLC, be certain that your trust owns the membership shares.

You say these stocks are for retirement. If they are being held in some type of retirement account such as an IRA or 401 K, they are already protected.  The government has a great interest in protecting retirement accounts, so they won’t make them available to creditors.  You can learn all about the trusts and their uses in my book, Protecting Your Financial Future, which is a fun, easy read.