Q: What are asset protection trusts?
Many people venture off to their first appointment with a New York or New Jersey estate planning attorney thinking they will come out of it with a last will and testament– commonly known simply as a “will”. But that isn’t always the case. In fact, a comprehensive estate plan will likely include several additional documents.
In a nutshell, an estate plan will generally include a will which not only disposes of your property after you die but also names a guardian for any minor children and names an executor to handle administering your estate in accordance with your wishes. A will distributes the estate through the probate court process which is public, expensive, and more time-consuming than if the property passed to beneficiaries outside of probate through a trust.
In addition to–or instead of–a will, many people can benefit by using trusts in their estate planning. In addition to avoiding probate and being private, trusts may be revocable or irrevocable, depending on their purpose, and are useful in different situations. Instead of keeping property in their name, the person making the trust transfers ownership of the property to the trust and the named trustee manages that property for the benefit of a third-party known as the beneficiary.
Types of Trusts
People use trusts in estate planning in some of the following ways:
- trusts for minors
- special needs trusts
- marital trusts for tax or property protection reasons
- revocable living trusts
- irrevocable life insurance trusts
- spend thrift trusts.
Asset protection trusts– as the name implies– are used to shield or protect your assets from creditors and lawsuits.
Asset protection trusts may safeguard your and your loved ones’ financial future, minimize estate taxes, and help in Medicaid planning. Proper Medicaid planning can prevent your life savings from being wiped out in the event you need long-term nursing home care. Asset protection trust are also popular with business owners and people of high wealth.
If you need assistance with an initial estate plan or would like to modify an existing one or wonder if an asset protection trust is right for you, the estate planning experts at Merlino & Gonzalez can help you. Contact us today to schedule a consultation.
From our offices in Staten Island, New York and East Brunswick, New Jersey we assist clients in both states in all aspects of estate planning and estate administration.