The intention in creating a silent trust is generally to do any of the following EXCEPT:

The intention in creating a silent trust is generally to do any of the following EXCEPT:

• A. Keep knowledge of a trust from being a disincentive for young beneficiaries to productive activities like education and work
• B. Maintain family business privacy
• C. Shelter the trustee from liability
• D. Shelter assets and information from potential creditors

Answer: (C)

Silent trusts are used to keep trust terms private and to control who knows about the arrangement. By maintaining confidentiality, they help prevent premature knowledge of the trust from affecting a young beneficiary’s motivation to pursue education or work, and they also protect sensitive family business information. They can also be used to shield assets and information from potential creditors in some contexts. But the idea of sheltering the trustee from liability isn’t how these trusts work; trustees still have fiduciary duties and can be liable for mismanagement or breaches of trust regardless of the trust’s secrecy.

Silent trusts are used to keep trust terms private and to control who knows about the arrangement. By maintaining confidentiality, they help prevent premature knowledge of the trust from affecting a young beneficiary’s motivation to pursue education or work, and they also protect sensitive family business information. They can also be used to shield assets and information from potential creditors in some contexts. But the idea of sheltering the trustee from liability isn’t how these trusts work; trustees still have fiduciary duties and can be liable for mismanagement or breaches of trust regardless of the trust’s secrecy.