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Are There Different Kinds Of Asset Protection Trusts?

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asset protection trusts

If you are concerned about the protection of your wealth, you may be interested in learning about asset protection trusts. There are different kinds of trusts you can create to provide protection for your money and property. Parman & Easterday can provide assistance in understanding trust laws and in making smart choices about the asset protection strategies to use. 

Creating effective and legally-valid asset protection trusts is complicated, especially as trust law requires you to follow very specific steps to create trusts that keep wealth safe. Our Overland Park trust lawyers know the ins-and-outs of trust law and can make sure you use the best and most effective legal tools to provide maximum protection for your assets.

Different Types Of Asset Protection Trusts

There are many different kinds of trusts, each of which can help you accomplish different goals, such as securing your wealth and protecting your financial stability.

Revocable living trusts are created during your lifetime and provide you with continued control over the trust assets until you die or become incapacitated. This type of trust will not protect your assets from loss to creditor claims or nursing home bills, but may help protect wealth in case of incapacity. Irrevocable trusts may require you to relinquish significant control over trust assets, but provide protection that revocable living trusts cannot.

The Domestic Asset Protection Trust (DAPT) is a special type of irrevocable trust. As the American Bar Association explains, a DAPT cannot be created in every jurisdiction and there are specific guidelines for how the trust document must be structured and how the trust will work.

Because of the substantial potential for mistakes in creating asset protection trusts, including selecting the wrong type of trust, it is important to work with an attorney who can advise you on trust creation.

An experienced attorney will discuss the different types of trusts  and assist you in selecting the trust that will achieve your desired outcome.

Substantial amounts of money may be at risk and you may not discover problems with your trust until you need it for protection, so do not hesitate to get proper advice in trust creation. Parman & Easterday is here to provide the assistance you need to make a legally valid trust.

What Kind Of Asset Protection Trusts Are Right For You?

Because there are different types of asset protection trusts for different purposes, talk with an experienced attorney to select the right trust type. Things to think about when selecting an asset protection trust include:

  • Potential threats to your wealth. Are you more concerned about keeping assets safe in case you need nursing home care or is your concern about estate tax or irresponsible heirs? Your trust must be tailored to the biggest risks you face.
  • Types of assets you own. Make certain the trust you create is the kind of trust to which you are able to transfer your types of assets.
  • Tax implications of transferring property into trust. Be sure you understand when and how the property in the trust will be taxed and make sure your strategic asset protection plan minimizes your tax liability.

There are other factors relevant to selecting the best type of trust to use for asset protection. You should work with Parman & Easterday to get personalized advice from an Overland Park trust lawyer who can assist you in choosing the type of trust that makes the most sense to meet your needs.

Getting Help From An Overland Park Trust Lawyer

To discover more about how asset protection trusts work and what type of trust may be right for you, call us today at (405) 843-6100 or contact us online.

You can also join us for a free seminar for general advice on trust law. Our Overland Park trust attorneys have extensive experience helping clients with wealth protection and can assist you no matter where you are in the wealth building process. Call today to find out more.

Larry Parman, Attorney at Law
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