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What Is An Asset Protection Trust?

Enhance Your Legacy Planning for 2024
Will an asset protection trust protect your assets from creditors, lawsuits, or other financial risks? If you're considering an asset protection trust or want to learn more about how it can fit into your estate plan, this article will guide you to the next step.

As experienced estate planning attorneys, Beck, Lenox and Stolzer Estate Planning and Elder Law wants to guide you through the complexities of asset protection trusts, a crucial tool in safeguarding your assets. This article will explore the various aspects of these trusts, providing in-depth insights and practical advice to help you make informed decisions. What is an Asset Protection Trust?

An asset protection trust (APT) is a special type of trust designed to shield assets from creditors, lawsuits and other potential financial threats. Unlike regular trusts, an APT places your assets out of the reach of creditors, ensuring that your wealth is protected for future generations. APTs are established in jurisdictions with favorable trust laws, offering robust legal protection.

Types of APTs

There are two primary types of APTs: domestic and offshore. Domestic asset protection trusts are established within the U.S and are governed by state law. On the other hand, offshore asset protection trusts, also known as foreign asset protection trusts, are set up in countries with laws that offer more stringent protections against creditors.

Establishing this Type of Trust

Creating an APT involves transferring your assets into the trust. This process requires careful planning and legal aptitude to ensure that the trust is set up correctly and offers the maximum protection for your assets.

The Role of Irrevocable Trusts in Asset Protection

APTs are usually irrevocable. This means that once the trust is established and assets are transferred, the trust cannot be altered or revoked. The irrevocable nature of these trusts is a critical element in providing effective protection against creditors and legal judgments.

How Can It Benefit Your Estate Plan?

Incorporating an APT into your estate plan can offer numerous benefits. It not only protects your assets from creditors but also helps in estate tax planning and preserving wealth for future generations. This kind of trust may be an essential component of a comprehensive estate plan.

Understanding the Pros and Cons

Like any financial strategy, APTs have their pros and cons. On the one hand, they offer robust protection for your assets and peace of mind. On the other hand, they require relinquishing control over the trust assets, which may involve complex legal and tax considerations.

Qualifying for Medicaid

APTs can also play a role in Medicaid planning. By placing assets within a trust, you may be able to meet the asset limits for Medicaid eligibility, thereby qualifying for Medicaid benefits while protecting your wealth. Beck, Lenox and Stolzer have provided asset protection trusts while successfully filing over 3,000 Medicaid applications for clients.

The Importance of an Estate Planning Attorney in Setting Up a Trust

Setting up an APT requires the capability of an experienced estate planning attorney. An attorney can help you navigate the legal complexities and ensure that the trust is established in accordance with your specific needs and goals.

Why Consider an Asset Protection Trust?

Consider one if you’re concerned about protecting your assets from creditors, lawsuits, or other financial risks. It can be a powerful tool in your estate planning arsenal, providing security and peace of mind for you and your beneficiaries.

If you’re considering an APT or want to learn more about how it can fit into your estate plan, schedule a consultation with Beck, Lenox and Stolzer. Prospective clients can schedule an initial phone consultation at no charge by clicking here. Current clients should contact our office by phone. Learn more about what is an asset protection trust and how it can protect your assets and secure your legacy as part of your estate planning strategy.


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