Trusts are one of the most common tools referenced by people in a variety of different financial situations who wish to provide a greater level of flexibility and control over the assets they place inside.
Another common reason to establish a trust is to help to protect the assets inside it from being seized by creditors or potentially being exposed to a future ex-spouse in a non-blood related future ex-spouse in a divorce proceeding. An asset protection trust simply helps to remove the person’s assets from their individual legal ownership and places them inside the trust. While these kinds of trusts can be set up outside of the United States, it does not always mean that every type of asset has to be transferred to a foreign jurisdiction.
A potential creditor attack is a leading reason why someone might be interested in establishing an asset protection trust, since the purpose of this document is to help insulate assets from creditors attempting to seize them in the future. These trusts are typically irrevocable for a term of years such that the trust maker isn’t clearly not a current beneficiary of this estate planning strategy.
Often an asset protection trusts created with the help of a Pasadena estate planning lawyer is structured so that any undistributed assets still inside the trust go back to the trust maker’s ownership at the time that the trust terminates and there is no longer a risk of creditor attack. Usually, however, many people will keep these types of trust active for a long period of time to get the peace of mind provided by them.