More Than Paperwork: How Private Retirement Trusts Are Built to Last
After laying the statutory and strategic groundwork in Parts 1 and 2 of the Private Retirement Trust Series, Part 3 shifts focus from theory to execution. In this installment, attorney Dustin Nichols opens up the blueprint, showing exactly how a Private Retirement Trust (PRT) moves from an idea to a defensible, functioning asset protection strategy under California law.
It’s not just about drafting documents. It’s about telling a compelling retirement story—one that stands up to scrutiny and serves a genuine purpose.
From Discovery to Design
The first phase in implementing a PRT begins not with forms, but with due diligence. Nichols walks through how to evaluate whether a client’s situation supports exemption planning, including a solvency review, liability analysis, and net worth inventory.
But more than that, it starts with a simple question:
Does this person have a legitimate retirement need—and can we prove it?
A key step is the retirement appraisal, a customized model that projects the participant’s retirement need based on age, lifestyle, and asset base. This number becomes the guide rail for funding the trust and the anchor for its legal justification. Without it, the plan lacks both structure and story.
Building the Team That Builds the Trust
With due diligence complete, the next phase is creating and implementing the PRT itself. But as Nichols explains, a strong PRT is never a solo effort. It’s built by a team of professionals, each playing a distinct role:
- • The Retirement Planner designs the retirement model and funding schedule
- • The Trustee oversees legal compliance and exercises discretionary power
- • The Investment Advisor manages trust assets
- • The Trust Protector serves as a check on the trustee’s discretion
- • The Plan Administrator ensures reporting and procedural consistency
Each role adds a layer of independence and discipline—traits courts look for when determining whether a PRT was created for legitimate retirement purposes or simply as a reactive shield.
Execution with Intention
In this session, Nichols walks through a real-world client case that illustrates each implementation step, from corporate sponsorship to contribution strategy. He explains how assets are recharacterized into retirement property, why proper plan sponsorship matters, and how the trust structure must align with the participant’s business and estate plan.
PRTs can be funded with a wide range of assets, including promissory notes, insurance contracts, and hard assets, but the key is making sure those assets serve a real retirement function. Anything that appears self-serving or excessive could risk the trust’s exempt status.
Just as important is the third and final phase: ongoing administration. Nichols outlines how annual reviews, plan contributions, and documentation updates all contribute to the long-term defensibility of the trust.
Structure Is Strategy
What Part 3 makes clear is that protection doesn’t come from the paperwork—it comes from the planning. A PRT must be designed, justified, and operated in a way that reflects retirement intent, financial discipline, and legal coherence.
The result is a structure that not only provides long-term protection but holds up when examined. As Nichols reminds us, the strongest trusts are the ones that don’t just look good on paper. They work, because they were built on purpose.