What is Asset Protection Trust?
Oct. 11, 2022
An asset protection trust (APT) is a legal arrangement that can help protect your assets from creditors and lawsuits. This type of trust can be very beneficial for high-net-worth individuals, business owners, and other individuals who want to protect their assets in case of unforeseen events.
In this article, we will discuss what a APT is and who can benefit from having one.
What is an APT?
An APT is an irrevocable trust that can be used to protect your assets. The trustee of an APT has complete control over the trust assets but must use them for the benefit of beneficiaries. The beneficiaries of an APT can be your spouse, children, or other relatives.
Who might benefit from an APT?
An APT can be beneficial for individuals who are concerned about lawsuits or creditors. If you have significant assets, such as a business, an APT can help protect those assets from creditors. It can also be used if you are concerned about your heirs spending their inheritance recklessly.
You can also use an APT to educate your heirs on wise financial habits. For instance, you can allow your heirs to serve as co-trustee with a trusted third-party who can teach them how to properly manage the trust’s assets. Over time, you can give your heirs more responsibility, eventually enabling them to become a trustee of the assets if they are capable of doing so.
You can also place restrictions on how trust assets can be used. For example, you could require that trust assets only be used for education or retirement.
Our Office Can Help
If you are considering creating an asset protection trust, it is important to consult with an experienced attorney. Please Click here to Schedule a FREE Virtual Estate Planning Session, and we’ll help you determine if an APT will meet your goals.
PARENTING TIP :
Teach your children about credit. Credit is something that can be very beneficial to adults, but it can also be very dangerous. It’s important to teach your children about credit so they can understand how to use it wisely when they become adults. One way you can teach your children about credit is by helping them get a credit card. You can add them as an authorized user on your credit card so they can start building their own credit history. You can also give them a prepaid debit card so they can learn how to use plastic responsibly without getting into debt.