So you create a Trust to protect your family wealth from creditors and banks. Is this an easy way to cheat banks and creditors? That you can transfer all your assets into a Trust and squander all money you borrowed from banks. It is hardly possible. If the settlor becomes bankrupt within two years after the date of transfer (assets, from settlor to the trustee), the transfer is void. If the settlor becomes bankrupt within five years after the date of transfer, it has to be proven that the settlor was at the time of making the transfer able to pay all his debts without the aid of the property.
If you plan right from the beginning determining to run a loss making business, get the loans from banks and never to pay back, you are short changing yourself. A well run business can make more money for you than you can ever borrow as loan. It is simply stupid to do it even if you do not hold on to any principle of life.
Trust is an excellent instrument to protect. However, when you attempt to abuse the instrument, it can only bring you little further with repercussion.
Part 1: Trust, a shield for financial certainty
Part 2: Trust: A shield for financial certainty (2)
Part 3: Setting up a trust