3 Trusts That Provide Asset Protection
Trusts are a useful way for individuals and couples to protect their assets for themselves and loved ones. The Motley Fool compiled an up-to-date list of trusts that are available for those of all income brackets when preparing for the financial needs of a family. Here are some of the best trusts for asset protection.
A revocable trust has practical value for many people and could be used as a primary tool for estate planning. The revocable trust is versatile and can be changed while one is alive. This living trust allows one to put the property in the trust and dictate how it should be managed and distributed. This does not just provide benefit to heirs. If one becomes incapacitated, the trustee could manage one’s financial affairs. Additionally, the trust can help loved ones after a decedent passes. Wills are typically subject to the probate process while trusts are not.
Life insurance trusts allow you or loved ones to get more benefits from a policy by avoiding estate taxes. If a policy is in a person’s name, the death benefit that heirs receive is part of the person’s taxable estate. This can be avoided when the life insurance trust owns the policy, but the trust must be drafted correctly.
While still subject to some taxes, trusts can be used to avoid high estate taxes in many cases like when putting the property in a qualified personal residence trust. This is because one’s estate is reduced if assets are in a trust instead. The items belong to the trust and not the grantor.
There are multiple ways to draft trusts to protect assets and make estate laws work for you and your family. For more information, contact us today.