Asset Protection Trust

Asset protection trusts are estate planning mechanisms which allow for individuals to keep their property and assets protected from liability, bankruptcy, long term care and other situations which would potentially reduce one’s asset level.

Requirements for Asset Protection Trusts

The asset protection trust is frequently utilized with intricate estate planning where the estate is expected to exceed at least one million dollars.  The asset protection trust can contain basically all types of property, including the home, vehicles, bank accounts and other assets.  The asset protection trust is established pursuant to the particular laws of the state in which the individual seeks to establish the trust.  Some states refer to this type of trust by the state’s name, such as the “Delaware Trust” for the State of Delaware.  Moreover, the trust is sometimes called a “spendthrift trust” or a “self settled spendthrift trust.”  The trust is established pursuant to a legal document in conjunction with the retitling of assets which are placed into the trust.  In addition, the trust is usually created in connection with a last will and testament, which refers to the trust.  The will may also be a “pourover” will, which will automatically place any untitled assets into the name of the trust at the death of the owner.  Items placed in the trust are not subject to probate, which is the process by which a will is reviewed and administered via the court’s oversight.

Help With Medicaid Planning

Asset protection trusts are useful when doing Medicaid planning.  Assets in the trust are generally protected from long term care expenses, if the assets have been placed in the trust properly and have been contained in the trust for a certain statutorily proscribed period of time.  Asset protection trusts are not appropriate for every estate plan; therefore, a consultation with an experienced estate planning attorney will ensure that your specific needs and interests are fulfilled by creating an estate plan which is tailored to your particular requirements.