What to Keep Out of a Trust

Putting assets in trust can protect them from creditors but not every asset can or should be transferred to a trust. Your house and your cars, for example, are generally not suited to be held in trust. Some states exempt such assets from the reach of creditors, but there may be dollar limits on these exemptions.

For your cars, here are some ideas:

* To protect a vehicle from creditors, you might lease a new one each year with zero down so that little or no equity builds up. A creditor can only take what actually belongs to you, not what’s owned by the bank.

* If you operate a sideline business as a corporation and the vehicle is used for a legitimate business purpose, the corporation can own the car. Again, such ownership may keep a car from being attached by creditors.

* Let your spouse own the family cars (and the house, too). As long as you’re in a sound marriage, this a simple way to keep assets from your ownership and out of the reach of your creditors, assuming you’re the spouse most likely to need asset protection.