Wealth Protection Trusts

A wealth protection trust is a legal arrangement that can be customized to protect heirs and assets from creditors, lawsuits, and potential divorce settlements. It helps secure family wealth and can be structured in various ways to meet specific needs and goals.

A wealth protection trust works by placing assets into the trust, which is then managed by a trustee on behalf of the beneficiaries. For most of the Trusts we help clients establish, the clients are their own initial trustees. The assets are legally owned by the trust, not by the individual, which helps protect them from claims by creditors or others.

Setting up a wealth protection trust can offer several benefits, including asset protection, estate tax minimization, privacy, and control over how assets are distributed to beneficiaries. It also provides peace of mind knowing assets are protected from potential legal issues.

After the grantor’s death, the assets held in the trust are distributed according to the terms set forth in the trust agreement, bypassing the need for probate. This ensures a smooth and private transfer of deeds or assets to beneficiaries.

Yes, a well-structured wealth protection trust can help reduce inheritance tax by removing assets from your taxable estate. If assets are transferred into an irrevocable trust, they are no longer considered part of your estate for tax purposes, potentially lowering the amount subject to inheritance tax.

Inheritance tax will depend on how the trust is structured. If the trust is irrevocable, the assets are typically not included in the estate of the person who created the trust, which can reduce the inheritance tax burden. However, it’s important to consult with an estate planning attorney to discuss estate tax planning and ensure that the trust is set up in a way that minimizes tax liabilities.