What is a Naked Trust?
How Does a Naked Trust Work?
Let's say John Doe is in a shaky marriage and wants to make sure $1 million of his money in a naked trust for his children.
The children are only 10 and 8 years old, but when they turn 18, they have control over the assets. In the meantime, John's wife cannot touch the assets, and a manages the money on behalf of the children rather than on behalf of John Doe.
Why Does a Naked Trust Matter?
Naked trusts are a way to ensure that money.receive assets as intended, but they also the benefactor gives up control over the assets. Additionally, age is typically the only condition of a naked trust, meaning that the can't withhold from the trust if, say, John's children drop out of college, become addicted to drugs, or marry someone John doesn't like. The children simply must be at least 18 years old to obtain full control over the