What Happens if a Dissolved Trust Gets Sued?

In this episode of Ask Joe, Attorney Joe Seagle discusses how to navigate lawsuits against a dissolved land trust. Joe explains that if a land trust has been dissolved and someone sues the trust, there is usually no need to hire an attorney or defend the action because the land trust no longer exists and has no assets.

However, if the plaintiff tries to go after the beneficiaries, there is no clear answer in Florida law. In the past, attempts to go after beneficiaries after the trust has been terminated have been unsuccessful. It is recommended to use another LLC or corporation as the beneficiary of a land trust for added asset protection. If the plaintiff manages to sue the land trust and reach the beneficiary, having an LLC or corporation as the beneficiary ensures that the judgment is worthless as they have no assets. It is advised to have an LLC or corporation as the beneficiary for any property other than a homestead property.

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