| Using Asset Protection Trusts |
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Trusts are useful for many purposes, including avoidance of probate court, elimination of federal estate taxes, and management and control of property for a beneficiary when direct ownership of the property by the beneficiary is not desired. They also can be very useful for asset protection purposes, where the creditors of the beneficiary are prevented from reaching the trust's assets. Here, we'll concentrate on the last objective--namely, the use of the trust as an asset protection device. A trust can be an effective way to place assets outside the reach of creditors. However, not all forms of a trust will function as an asset protection device. Further, even a properly structured asset protection trust can be challenged by creditors. Before these issues can be addressed, you must understand some basic ideas about the nature of a trust. Common forms of trusts, and their objectives, are also briefly considered, with special emphasis on the asset protection trust. |
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