Protecting your hard earned assets from ever increasing tax burdens and any unforeseen legal judgments against you is an essential part of a good asset protection strategy. An asset protection strategy includes a number of legal and financial maneuvers designed to keep your assets, family and any other beneficiaries of your estate safe from taxes, aggressive creditors and financial predators. One great way to protect your assets is by setting up a trust.
The creator of a trust is called a grantor. The grantor, often with the aid of a legal estate planning attorney, designs the rules and conditions of the trust, decides what assets will go in the trust and how those assets will be distributed to heirs or other beneficiaries the grantor chooses. There are two main types of trusts: revocable and irrevocable. A revocable trust allows you, the grantor, to change the conditions, rules and beneficiaries of the trust at any time. An irrevocable trust does not allow this. An experienced estate planning attorney can help you determine what kind of trust works for you.
Revocable Living Trust
Setting up a revocable living trust is a great way to protect your assets for the remainder of your life and after your death. The revocable living trust allows you to specify what it contains, the rules, to whom the assets are to be distributed and when they will be distributed. Setting up a trust in this way allows you to retain control over your assets. The trust can be changed or modified at any time in alignment with your changing priorities and circumstance. Further, the living trust can also be designed to appoint an administrator, called a trustee, in the event that you become incapacitated or otherwise unable to manage your assets. The trustee will be subject to the rules of the trust and will oversee your affairs.
A revocable living trust usually avoids the slow process of probate upon your death, allowing your assets to be distributed to your beneficiaries in a private, speedy manner away from the prying eye and costs of the public court. Revocable living trusts, however, may still be subject to estate taxes.
Irrevocable Trust
An irrevocable living trust is a trust designed for maximum asset protection. Setting up a trust in this manner transfers your assets from your estate to the trust. Since the assets are no longer legally a part of your estate, they are usually protected from creditors, taxes and probate.
However, this level of protection comes at a price. Once the trust is executed, you – the grantor – are no longer in control of your assets and you cannot change or dissolve the trust.
The assets in this situation are subject only to the rules that you, as the grantor, create for them. When setting up a trust that is irrevocable, it is important to seek out a qualified and experienced estate management and planning team.
Setting up a Trust with Kalicki Collier Law Firm
At Kalicki Collier, we believe that the greatest priority in estate planning is protecting your assets for your family and loved ones. We understand that this process can be a difficult and sensitive experience and we seek to reduce the stress associated with it. Our experienced and friendly law team will help you set up the legal infrastructure to protect your assets for you, your children and your loved ones into the future. Contact us today to get started protecting your family’s future and your legacy.