What Benefits Does a Trust Offer?

A Video FAQ with Mary E. Vandenack.

A trust can offer a variety of benefits. One possibility is probate avoidance. If all of your assets are titled in a trust, then the assets are not going to go through the probate process in that state.

Another advantage that a trust can offer is to protect assets from creditors. If I create a trust for my son, depending on how I structure that trust, there are certain protections from his creditors or from a divorcing spouse.

Another benefit of using a trust is to reduce estate taxes. If you have an estate tax exposure, there are certain ways you can structure the trust to protect those assets.

You can also control disposition among a mixed family. If your particular estate plan involves a remarriage and kids from one or more families, you can set up a trust so that each is treated, in some respect, fairly within that trust.

© 2014 Parsonage Vandenack Williams LLC

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Exercising Care in Asset Protection Trust

A recent Washington bankruptcy case is a reminder of the need to structure asset protection trusts with care. In the case,  the court allowed creditors to reach the assets of an Alaska asset protection trust set up by a real estate developer. The court based its decision on a number of factors. Few trust assets were located in Alaska and several badges of fraud were present. The court applied Washington law despite the fact that the trust recited that Alaska law applied.

In structuring an asset protection trust, settlors should have or create a relationship with the state where the trust is being established. An asset protection trust will provide its best protection if created and funded when creditors are not pounding down the door.

© 2013 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com