An asset protection trust is essentially a trust fund designed to protect your assets. This might include your home, cars, bank accounts, and any other tangible assets that might be subject to depletion by any number of things.
While an asset protection trust is often utilized in estate planning processes where the estate value exceeds a million dollars, this does not mean you might not want or need this sort of protection if your estate has a value less than that.
Long-term health care expenses, for example, can easily deplete the property and funds you intend to leave to your family. If you required long-term health care, a properly established trust would protect your assets. In other words, the care provider could not lay claim to assets protected by the trust or attempt to seize them in the collection of a debt.
An asset protection trust is often used as an add-on to a last will and testament. In the event of the death of the owner of the estate, properly titled assets inside the asset protection trust prevent these assets from being subject to probate, which is the legal administration of an estate based on the decision of the court.
It is important to have a trust set up before events occur that could prevent the protection of assets. This type of trust fund has to be in place for a specified time period in order for it to be fully protected.
Do you need an asset protection trust? Only an experienced estate planning attorney can provide the proper guidance based on your specific needs regarding an asset protection trust and whether or not this type of protection will benefit you and your family.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.