Explain This Bit Regard Michael Jackson's Assets

Factual Questions
1

Full story from the Associated Press

My question is if the trust is protected from creditors, why would any bank allow it to be used as collateral? Is this a common thing? I guess they figured he’d live long enough to pay it back. But basically if it’s protected doesn’t it amount to a signature loan. If so, I’d be made if I had stock in BoA

2

Interesting, if it is in a trust then technically it does not belong to him, and if the beneficiaries are his children (not him) then he has no claim on the assets, even as ‘expectations’.

If he were not dead, and if this is totally true, then it looks as if he would be looking at a charge of ripping of a trust, while a trustee.

However the real situation is probably more complicated, newspapers are not totally reliable.

3

Trusts are very often set up so that the original value (the corpus) is indeed given to the trust as a legal entity and is protected. However, the people setting up the trust still want to benefit from the assets in the trust, such as by living off the interest, royalties, etc.

If MJ was the legal recipient for the income on the assets in the trust, then he could use it as a sort of collateral - not in the sense that the bank could seize its assets if the loan defaulted, but in the sense of showing that he had an income to make the payments on the loan.

4

Thanks that makes sense