Asset Protection and Estate Planning: How to Integrate Them

Estate planning has many variables, but one of the main focal points is asset protection. One way to protect assets from creditors is using an Asset Protection Trust, which is only allowed in a handful of states. It is an investment managed by an independent trustee that allows for occasional distributions based on the trustee's discretionary evaluation.

Here are ways to integrate asset protection into estate planning:

Protecting Beneficiaries The main purpose of integrating an Asset Protection Trust into your estate planning is to make sure that your beneficiaries do not have to deal with extra-legal headaches like debt collection. Since inheritance can be a complex issue and beneficiaries may not have adequate financial knowledge, an Asset Protection Trust simplifies the matter. It protects assets from being distributed to someone such as a new spouse instead of your children.

Asset Protection

Various Types of Trusts There are different types of asset trusts to consider. Since minors cannot legally accept inheritance, you may want to structure a Discretionary Trust for a minor. Other special trusts can be set up based on individual beneficiary situations, such as adults who may have problems with money management or addiction, in which a Lifetime Discretionary Trust may be appropriate. A Special Needs Trust can be used for disabled beneficiaries who risk losing government benefits.

Customizing Asset Protection Asset protection trusts can be set up to be specific or flexible, depending on your perspective. You may structure the trust, for example, so that when your child reaches a certain goal like achieving a college degree they become a co-Trustee. Trust distribution can be set up to pay specific bills or however the beneficiary wants to use them. You may want to make stipulations that assets can only be distributed if certain requirements are met by your beneficiaries.

See Also: 5 Best Year End Tax Saving Tips for Small Business Owners

Keating and Lyden

Keating & Lyden LLC was founded by attorneys-at-law, Robert J. Keating, and Thomas P. Lyden and is based in Boulder, Colorado, and Bellingham, Washington. The attorneys specialize in providing legal advice in real estate matters to businesses and individuals pertaining to real estate management and operation including: tenancy in common agreements, partition agreements, real estate financing, homeowner’s associations and land use issues. They also provide the highest quality legal services to small business owners and entrepreneurs.

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