An asset protection trust is one of many legal tools that you can use to try to protect your wealth. However, not all trusts are created equal and not all trusts will provide you the full protection for your assets that you are expecting. In order to make sure your assets are actually kept safe, you must understand exactly what all of your options are and you must make sure you follow proper protocols for trust creation.
A Burlington trusts lawyer can help you with the creation of an asset protection trust and can assist you in taking the steps you need to keep your nest egg secure both at the end of your life and when you have passed away. Contact Unsworth LaPlante, PLLC to find out more about the ways in which we can assist you in making use of the legal tools for asset protection that are available in Vermont.
Choosing the Right Type of Asset Protection Trust
According to Investopedia, asset protection trusts are defined as: “a vehicle for holding an individual’s assets to shield them from creditors.”
Asset protection trusts are not permitted in all states. This type of trust can be created in Alaska, Delaware, Rhode Island, Nevada, and South Dakota. Offshore financial centers also make it possible for asset protection trusts to be created. Examples include Nevis and the Cook Islands.
When this type of trust is created, the trust is the owner of the assets and the assets are largely shielded from being accessible to creditors. Because assets are protected, those who wish to pursue a claim against the person who has created the trust may feel as if litigating to recover damages is hopeless. Getting a judgment is only worthwhile if it can be paid, and the judgment cannot be collected when some or most assets are held in an asset protection trust.
How to Create Your Asset Protection Trust
There are complex requirements associated with creating an asset protection trust aimed at putting assets beyond the reach of creditors. Those who wish to create this type of trust will need to determine where the trust should be created, and how it should be funded. Unsworth LaPlante, PLLC can provide assistance with each of the different steps in the trust creation process, including the step of deciding what trust is the right one.
There are actually lots of different kinds of trusts, some of which can provide broad and comprehensive protection for assets and others which provide only limited protection for wealth and investments. For example, revocable trusts can provide flexibility with money management and protect assets in case of incapacity, but this type of trust does not make it possible to protect assets from other substantial risk of loss.
Revocable trusts, for example, cannot be used to shield assets from being counted when determining if a person is eligible for Medicaid to pay for a nursing home. If a nursing home becomes necessary, assets in the revocable trust will typically need to be spent down. The senior could lose valuable assets and property paying for a nursing home, and Medicaid will pay only after the assets are gone. Revocable trusts also do not prevent assets held in the trust from being subject to estate taxes and typically do not put assets beyond the reach of creditors.
When choosing the right type of asset protection trust, it is important to consider not only the risks faced during your lifetime but also the dangers to trust assets which could arise after you have passed away. New owners could be irresponsible with money, unable to manage trust assets, or at risk of losing trust assets in a divorce or to creditors. It is important to consider how to protect the assets which you have left as a legacy by making sure bad decisions made by heirs cannot deplete the trust assets too quickly.
Getting Help from a Burlington Asset Protection Lawyer
No matter what type of trust you want to create or what your financial goals are, Unsworth LaPlante, PLLC is here to provide you with the help that you need and deserve. Give our Burlington asset protection lawyers a call today at (802) 879-7133 or contact us online today so we can get started on protecting your wealth.
You can also join us for a free seminar to find out more about the asset protection process and the options available to you under Vermont law for ensuring the security of your nest egg.