Personal Property Trust

Personal Property Trust

A Personal Property Trust is a type of living trust. This is a trust that acts almost as a separate entity from the grantor, or creator of the trust, who does not need to die before the trust comes to fruition.

A simple way of looking at it is as if the trust is another person. In this case, your belongings are put in the name of the trust instead of in your own name, but you can still reap the rewards of those items and use them.

Any legal ownership is taken by the trust and the trustee who manages the trust. 

Personal Property Trust- Living Trust and Estate Planning

What Assets Can Be Placed in a Personal Property Trust?

It is possible to transfer the ownership of many different items to a Personal Property Trust. Of course, the most popular items are larger items, where transferring them to the trust will provide some benefit to yourself. These include things like mortgages, vehicles, LLCs etc.

There are various reasons why you may want to add these items to a Personal Property Trust, but some of the main reasons are listed below; privacy and legal protection.

Advantages of a Personal Property Trust

When planning your financial future, especially with regards to your estate, it is important to know all the advantages and disadvantages of a management tool that you are considering in order to determine if it is the best thing for you.

A personal property trust is no different. Although there are many, let's look at the advantages that stand out.


As mentioned above, you do not necessarily need to die in order for a Personal Property Trust to be functional, like many other estate trusts that deal with inheritances. Instead, the trust owns your assets while you can still make use of them. One of the biggest advantages of this is privacy.

When an asset is listed underneath a Personal Property Trust, for all intents and purposes, it belongs to that trust.

This means that if the owners are ever looked up on any form of public record the trust will show up instead of you personally.

Of course, the registered name of the trust needs to be considered in these cases, but provided that the name does not indicate the owner, this privacy can be maintained by law

Legal Protection

In the case of a lawsuit, you do not technically own the items which you are making use of, such as your house. They belong to the Personal Property Trust. This means that creditors cannot claim the items, and they cannot be seen as collateral attached to your name.

This makes the Personal Property Trust ideal for those who are opening a high risk business, or who are unsure about the stability of their income in the years to come.


Most trusts are difficult to change, or sometimes impossible. But the Personal Property Trust is designed to be easy to alter. It is easy to add or remove an asset from the trust and as long as you are alive you are able to control everything within the trust as both the trustee and the beneficiary. 

In some cases, this can even continue after you have passed away, provided that you have put the necessary mechanisms in place, and your family can continue to alter the trust, while reaping all of its rewards. 

Personal Property Trust- Probate Asset Avoidance

Probate Asset Avoidance

Probate assets are any assets that are registered only in your name and need to go through probate court when you pass away, before they can be passed on to your beneficiaries. This can be a highly time consuming, and sometimes even costly process

In the case of a Personal Property Trust, this can be avoided. If the items are listed in the name of the trust then probate court will be skipped completely, allowing your beneficiaries to make use of the asset immediately after your death. 

Disadvantages of a Personal Property Trust

Personal Property Trusts only have two real disadvantages, but it is important that we look into them. 

Minimal State Protection

In the case of an LLC or corporation, they would receive some protection from the state. However, the same does not apply to a Personal Property Trust.

Some smaller businesses rely heavily on this protection that is provided by the state so it is important to take into account the possibility that it would fall away if that LLC or corporation, or some of the contents thereof, are transferred into a Personal Property Trust. 


As with all other trusts, it costs a substantial amount of money to set it up correctly. It is not recommended that you attempt to set up the trust yourself, as this can lead to mistakes that will take additional money and time to fix in the future, and that sometimes cannot be corrected

However, it is important to note that there are continuous costs to a Personal Property Trust after the initial setup. The reason for this is that a Trustee needs to be appointed, and that Trustee needs to be paid.

It is possible to appoint a Trustee as a family member or a friend, but then the name of the Trustee would be seen and the privacy of the Personal Property Trust may become null and void

Personal Property Trust- Cost

Is a Personal Property Trust for You?

The personal property trust has a variety of benefits and disadvantages as listed above. It is important to consider both before you decide if the Personal Property Trust is for you. It is greatly beneficial for those who wish to enter the field of real estate investment, or who have larger assets that they do not wish to go through probate when they pass away.

However, for the average person, owning one or two properties, the costs of the Personal Property Trust, especially regarding the appointment of a third-party Trustee, may far outweigh the benefits.

It is important to speak to a financial advisor or an attorney in order to determine if a Personal Property Trust would be beneficial to you.

You may also be interested in Personal Property List for Will and What is a Separate Property Trust?

Leave a Comment