Search Site

Using Asset Protection Trusts In Estate Plannings

With the estate tax credit so high, protecting assets against loss to creditors and predators or in divorce or bankruptcy has become a common goal of estate planning.  Do you want to leave an inheritance outright to a child or grandchild in this risky age of high divorce rates, lawsuits, and bankruptcies?  An outright inheritance can also be depleted quickly  or end up in the hands of your child’s spouse instead of in the hands of your child or grandchildren.  Finally, a beneficiary may be born with a disability or develop one later in life that may rapidly deplete their inheritance by disqualifying the beneficiary from receiving government assistance.  There are many types of third party asset protection trusts that you may want to consider to protect your children and grandchildren:

  • Trusts for minor beneficiaries – Minor beneficiaries cannot legally accept an inheritance and a trust ensures that the minor’s inheritance is prudently invested and used only for the minor’s benefit.
  • Trusts for adult beneficiaries – Adult beneficiaries who are not good with managing money, are in a lawsuit-prone profession, have an overreaching spouse, might get divorced, or have an addiction problem will benefit from a lifetime discretionary trust.
  • Trusts for surviving spouses – If you are worried that your spouse will not be able to manage their inheritance, will remarry, or will need nursing home care, you can create a lifetime discretionary trust for the benefit of your spouse.
  • Trusts for disabled beneficiaries – Disabled beneficiaries who receive an inheritance typically lose their government benefits and have to spend the inheritance before requalifying. On the other hand, an inheritance left to a special needs trust may be used to supplement, not replace, government assistance and will not cause disqualification.

Asset protection trusts offer many planning opportunities for people of even modest means.  We are available to answer your questions about asset protection trusts and help you integrate this type of planning into your estate plan.



Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form

Our Offices
  • Carlsbad Office
    1902 Wright Place
    Suite 200
    Carlsbad, California 92008
    Phone: 760-237-0323