Can Beneficiaries be Liable for the Debts of a Trust-Owned Business?

Trusts are structured with liability in mind, to keep the beneficiaries removed from the assets involved. Most Trusts are set up with personal property assets like land, or homes or vehicles, and their liabilities are somewhat limited. But some trusts hold assets like fully operating businesses, LLCs and corporations. So if a business held by a Trust ‘goes bad’, can the beneficiaries of that Trust become personally liable for any portion of the debt generated by any operational business assets within a Trust — especially if that debt exceeds the value of the assets in the trust?

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Can Debts Be Passed From One Corporation to Another if I Own Shares in Both?

An individual can be a shareholder in more than one corporation (think of an individual owning shares of both Ford and General Motors), and as long as the corporations retain a completely separate existence (i.e. keep separate books and records, maintain separate bank accounts, etc.), merely owning shares in separate companies should not cause financial … Read more

Am I Responsible for Debts of My Spouse or His Business if He Dies or Becomes Incapacitated?

Let’s use an example of a husband and wife who do not “mix finances”. The wife owns the house solely in her name, and the husband has a business solely in his name with debts both personal and under the business. They carefully keep completely separate bank accounts, credit card accounts, etc.

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