You've worked hard, accumulated property and monetary assets you want to pass on to your heirs. The logical conclusion is to set up a type of trust to protect your assets from creditors or unscrupulous parties.
To determine what is an asset protection trust, we first must define a trust in general terms. A trust is loosely defined as "confidence placed in a person (trustee) by making that person the nominal owner of property to be held or used for the benefit of one or more others (beneficiaries)."
According to Legal Information Institute, Cornell University Law School, "an asset protection trust is a self-trusted spendthrift trust which means that an individual creates a trust for himself that is protected from creditors." Asset protection trusts, in the past, were usually found outside the U.S., often called an offshore asset protection trust.
A spendthrift trust is further defined as a trust designed so that a beneficiary cannot sell or give away the equitable interest in trust property. The trust controls the property management. This protects from potential creditors of the beneficiary from those assets.
According to an article by Jay Adkisson, contributor for Forbes.com, trusts were originally implemented by the Romans before the time of Christ, but it ultimately was the English who transformed it into a tool for legal structure and planning,
inter vivos trusts, formed by the living for the benefit of the living.
By 1997 Alaska and several other US states passed legislation allowing irrevocable discretionary self-settled trusts and ultimately passed domestic asset protection trusts legislation.
Asset management, estate planning and financial planning are not complete without also adding asset protection trusts to the mix. Means of preserving and protecting a client's accumulated assets is of utmost importance.
Asset protection trusts don't have to be perplexing or confusing. For more information on how you can protect your family and your assets, please contact Us. Thanks.