If you have had an Asset Protection Trust (APT) drafted, you may be surprised to learn that the assets you seek to protect may not have been placed into the trust. In fact, 99% of drafted trusts are not funded. Do you know whether your Asset Protection Trust is funded?
At TrustFunding.com, we help our clients identify what needs to be done to fund their trusts according to their financial and estate planning strategies, and then we fund the trusts so they will actually work as designed for our clients. Learn more below regarding how funding works for your APT, and then contact us for a free virtual Funding Analysis.
Your Asset Protection Trust will do nothing to protect the assets in question until the trust is funded. That means transferring the assets into your APT, which is irrevocable: Once they are in the trust, you lose direct control of these assets. As the Grantor, you can also be a permissible beneficiary of your APT. Distributions may be possible at the trustee’s discretion, and beneficiaries are subject to a spendthrift clause.
The assets you seek to protect through an APT may include cash, securities, intellectual or physical business assets, real estate, recreational assets, or Limited Liability Companies (LLCs). Before funding an Asset Protection Trust, you may choose a strategy of transferring some such assets into an LLC. At TrustFunding.com, we can discuss the optimum plan for funding your trust and protecting your unique set of assets.
Foreign or “Offshore” Asset Protection Trusts have been in the popular consciousness for some time, and they often involve using offshore accounts to hold assets. Tax havens do not recognize US judgments against assets, which can translate to more privacy and protection for your assets in these jurisdictions.
At the time of writing, 17 states in the USA allow Domestic Asset Protection Trusts. Domestic APTs are a newer option that is more flexible than offshore APTs, but they traditionally do not have the same levels of protection and privacy as are found in the offshore approach. The US legal system applies to Domestic Asset Protection Trusts, meaning lawsuits, judgments, liens, court orders, bankruptcy, and laws within a given state can still pose risks to your assets in a Domestic APT.
There is not the same level of case law built up around Domestic APTs because they are relatively new. When funding your Asset Protection Trust, we will address these considerations and the different implications for each state.
You want to protect your assets from creditors, lawsuits, and potential judgments against your estate. If you don’t fund your Asset Protection Trust, nothing is protected. Time limit protections are in place to prevent abuse of the system when a lawsuit threatening assets may already be looming, so funding an APT quickly in response is not a solution to such risks. However, planning ahead and then taking earlier action to fund your Asset Protection Trust years before you would have reason to expect a lawsuit may help to prevent the likelihood of these types of risks to your assets.
It is vital to take action now to begin strategically funding your trust. The timely funding of your Asset Protection Trust is the most critical step of your APT strategy.
All your efforts to shield your asset from creditors, lawsuits, or judgments against your estate will go to waste if you do not fund the Asset Protection Trust you drafted. Not only does transferring assets to an APT provide protection, but it also can discourage lawsuits because of the additional effort required, and it can generally position you better in negotiations.
Depending on the state, you may also be missing out on state tax savings if you don’t fund your APT. You miss these opportunities if you do not fund your Asset Protection Trust promptly and strategically.
We handle the proper funding of our clients’ trusts, regardless of their state. Funding an Asset Protection Trust requires evaluating each asset regarding protection concerns, taxation implications, how you may utilize the assets in the future, and distribution options.
If you don’t fund your Asset Protection Trust, your assets have no protection. You will need to get your trust funded and meet the applicable time threshold for asset protection to go into effect. We are here to guide you through the right funding strategy for your unique situation, and we manage the heavy lifting of the funding process so you can be content with the knowledge that you have taken the proper steps to protect your assets.
Too many people have a trust drafted and then fail to fund it on time, falsely believing the tasks have been completed. TrustFunding.com helps you to avoid that mistake. Schedule a free virtual Funding Analysis using the form on our website or call us at (248) 987-0400. At TrustFunding.com, we take your trust across the finish line.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
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The information in this video is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.