LLTrusts.org
Limited Liability
First came the LLC. Then the LLP. Now they are joined by the LLT. Essentially, the LLT term is a synonym for a US irrevocable trust. Our sole mission is to explore the potential pros and cons of using “Limited Liability Trusts” language in the modern legal lexicon. If the term is going to be used, our mission is for it to happen responsibly.
The Argument for
Limited Liability Trusts
The Problem
We are trusts lawyers who grew tired of being asked “did you say ‘revocable,’ or ‘irrevocable?’”
The Solutions
Trusts lawyers long ago solved the first half of this problem by creating the informal synonym “living trust.” But “irrevocable trust” had no such informal synonym - until now.
Why It Works
It seems that US investors who already own LLC, LLP, and LP interests also feel comfortable with LLT language.
Legal Treatises
The LLT is not a new trust type. It’s simply an informal shorthand umbrella term for a long list of well-proven US trust types. So, the LLT term is not very helpful in a roomful of lawyers. But it can be helpful in a roomful of non-lawyers.
Non-Profit
This effort is not for profit. It’s our way of giving back to the community. There is no related patent, trademark, copyright, drafting software, or proprietary investment offering. Just a good idea you’re free to use - a simple tool for improving communication between lawyers and non-lawyers.
A Five Minute Sample Video
From Our Library of Interviews With US Trusts Experts
The Counterargument against
Limited Liability Trusts
The LLT term is far from perfect. In fact, even the “irrevocable trusts” term is far from perfect. The entire concept is an oversimplification that first appeared in Black’s Law Dictionary in 1910, and never went away. Arguably, it is so misleading and imprecise that we would be better off without it. According to that line of thinking, a memorable synonym for the “irrevocable trusts” term does not help anyone.
The confusions that spring from the “irrevocable trusts” concept include, but are not limited to:
1
‘Irrevocable’ trusts, in practice, are not unamendable or irrevocable at all, as they can often be changed.
2
Not all "irrevocable trusts” offer all of the several possible “limited liability” protections. Who is protected? And, from what?
3
Different “irrevocable trusts" are taxed very differently. Lumping them together is misleading about income, gift, and estate taxes.
4
Unlike LLCs, LLPs or LPs, a trust isn’t a business entity, so the “LLT” term may give the wrong impression.
For these reasons and others, the “LLT” term may further entrench a misleading concept.
At best, "LLT" can be a conversation starter—one way to begin a deeper discussion about the many important aspects of trusts law.
Invitation
