Let's say someone sues our small HOA for more than the HOA insurance will cover (for something that happened in the common area), and not finding enough, sues each owner for the rest. Would my assets be protected because it's in a trust?
Let's assume it was an issue of negligence and not criminal. Location is Idaho.
First of all, usually negligence by an HOA or its agents does not create liability for owners of the HOA directly.
Instead, it creates a debt of the HOA, which the HOA might choose to pay through assessments on individual owners.
But, the creditor probably doesn't have the right to compel the HOA to make those assessments, although they could starve the HOA of funds needed to operate and the creditors might be able to seize common interest property management by the HOA (depending, in part, on some quite subtle details of how the association has been set up that have varied, mostly as as matter of customary practice that changes in different time periods - in some HOAs, common interests are owned by the HOA, in others they are tenancy-in-common interests of the owners with limitations on transferability).
Second, self-settled trusts (i.e. trusts for you benefit funded with money from you) are almost always ineffective (outside some select asset protection oriented jurisdictions of which Idaho is not one) as they are a form of fraudulent transfer. So, no it wouldn't work.
In particular Idaho Statutes § 15-7-502(4) states:
If a person is both a settlor and beneficiary of the same trust, a provision restraining the voluntary or involuntary transfer of the settlor’s beneficial interest in such trust does not prevent the settlor’s creditors from satisfying claims from the settlor’s interest in the trust estate that relates to the portion of the trust that was contributed by the settlor.
The same subsection clarifies that federal rules related to grantor trusts are not relevant to this determination, and other parts of the statute also clarify the relevant definitions.
