Asset protection trusts can be a great resource for seniors who want to protect their hard- earned assets. These trusts can help ensure that the assets are passed on to the intended heirs, and that the senior’s wishes are followed. Asset protection trusts are designed to protect the assets of a senior from being seized by creditors or lenders in the event of a lawsuit or an unpaid debt. They can also help in the event of long-term care or other medical expenses, preventing the senior’s assets from being drained. With the help of an experienced attorney, seniors can create an asset protection trust that is tailored to their needs, ensuring their assets are protected and their wishes are followed.
What is an asset protection trust?
An asset protection trust is a trust created by an individual or couple to shield assets such as real estate, stocks, or bonds from potential creditors. Asset protection trusts are also known as creditor protection trusts, creditor shielding trusts, or defrauding trusts. Asset protection trusts are irrevocable and are designed to avoid probate. While there are many different types of trusts, with each having its own distinct advantages and disadvantages, all types of trusts typically have one thing in common: they are designed to protect the assets inside the trust from outside parties, such as creditors.
Benefits of an asset protection trust
-Protects assets from creditors
-Assets placed inside an irrevocable trust are out of the reach of creditors, making the trust a powerful tool for protecting assets. Creditors can’t go after assets that are held in a trust.
-Protects assets from heirs
-Asset protection trusts can be used to ensure that a certain amount of assets are distributed to heirs, while keeping the rest out of their hands. A properly drafted trust can ensure that a senior’s heirs receive only the amount they are entitled to, while keeping the rest of the assets safe.
-Provides asset liquidity
-Assets inside an irrevocable trust can be liquidated, but the trust assets must be used to repay the trust first. Essentially, the trust is first in line to receive the assets of the trust.
-Can be used for long-term care planning
-Some asset protection trusts can be used for long-term care planning, with the funds from the trust paying for the senior’s care, along with the income from the trust. Other trusts may be to protect assets for heirs.
-Can be used for tax planning
-Trusts can be used for estate tax planning, gifting tax planning, or both.
An asset protection trust is a trust created by an individual or couple to shield assets such as real estate, stocks, or bonds from potential creditors. Asset protection trusts are also known as creditor protection trusts, creditor shielding trusts, or defrauding trusts. Asset protection trusts are irrevocable and are designed to avoid probate.
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