There are many different scenarios where a trust may be your best option when it comes to protecting your assets. Trusts are a legal structure put in place to shield your home, property, and other important assets from danger. It allows you to preserve your income and assets in a manner that will provide you with peace of mind and access when necessary. While many people associate trusts with wealth and a certain level of richness, there are many other instances where a trust may be your best option. Before we get into whether or not a trust may be right for you, let’s go over a few trust basics in order to give you a better idea of this type of asset protection.
First and foremost, it is important to note that trusts are created by a settlor or grantor who funds or provides property to the trust. The person who creates the trust is then able to set the terms under which the assets should be managed or distributed, which includes to whom, when, and how. It is at this point that the grantor appoints trustees as well as beneficiaries. Keep in mind that the grantor can be the trustee, and certain trusts even allow the grantor to be both the trustee and the beneficiary.
Is a Trust Right for Me?
In order to determine if a trust is right for you, it is a good idea to ask a knowledgeable trust attorney the following questions:
- Can a trust protect my assets from creditors?
- Which trusts will protect any assets that are given to beneficiaries from creditors?
- Are there things I can do to improve trust protection?
- How much asset protection will I get from the different types of trusts?
With those considerations in mind, let’s take a brief look at the different types of trusts:
- Marital Trust
- Bypass Trust (also known as Credit Shelter Trust)
- Testamentary Trust
- Irrevocable Life Insurance Trust
- Charitable Lead Trust
- Generation-Skipping Trust
- Qualified Terminable Interest Property Trust
- Grantor Retained Annuity Trust
In order to determine which is best for your needs, please contact a trust attorney today.
Tips for Those Considering a Trust
Now, let’s look at a few tips for protecting your trust:
- Diversify your assets – It is recommended that you do not “put all your eggs in one basket”, so to speak. One of the best things you can do when it comes to your assets and finances is to diversify into different classes of investments.
- Enlist the help of an investment advisor – Picking a right trust can be tricky, especially if you have several different types of assets to protect. In order to ensure you are going with the right one and doing everything you can to keep your assets safe, it may be a good idea to ask for help from an investment advisor, as well as a trust attorney.
- Make sure the right person is appointed as trustee – Managing a trust can be quite complicated, especially if numerous beneficiaries and assets are involved. This is why it is imperative that the person selected as grantor and trustee have the skills and intention to do a good, fair job.
To learn more about trusts and the best practices for protecting your assets, please contact a trust attorney at Atkins & Markoff today.