In developing and delivering a personal and comprehensive estate plan, it is often necessary to incorporate more advanced asset protection planning concepts and documents into the overall plan for our clients. In addition to our Basic Estate Planning, Four Pillars Law Firm also provides the following non-inclusive list of more advanced asset protection planning documents which address various client concerns and needs while meeting clients’ overall estate planning goals:
- Asset Protection Trust – A planning document which allows you to organize your assets and affairs in advance so as to protect them from and avoid claims of creditors. As claims of “known” creditors may not be avoided, the time for conducting asset protection planning is now. Asset protection does not involve hiding assets, last-minute creditor protection or tax avoidance; it requires prior planning and should be considered during your ongoing estate planning needs, particularly when/if your situation changes (e.g. you are a high-profile professional in a somewhat risky career or you believe you may have a taxable estate and would like to minimize or avoid the same).
- Irrevocable Life Insurance Trust (“ILIT”) – A planning document which, if properly drafted and administered, may be used to minimize or avoid estate taxes. Although life insurance proceeds are not subject to income tax, they are subject to estate tax and the proceeds are generally included in your taxable estate upon your death. If you have a taxable estate, your loved ones may lose about half of the inheritable value of the assets, due to estate taxes, prior to receiving a dime of the life insurance proceeds. By creating this trust to specifically hold and own your life insurance, and using your annual gift tax exclusion to make cash gifts to the trust in order to pay the life insurance premiums, you may be able to avoid an estate or gift tax consequences relating to this trust and/or the life insurance held within it.
- Qualified Personal Residence Trust (“QPRT”) – A planning document which allows you to transfer your house, generally your most valuable asset, at a substantial tax discount, into a special trust and freeze the value of your home for your own estate tax purposes, while also creating asset/creditor protection for your home. Moreover, subject to certain trust administration issues, all of which may be properly addressed and handled, you may continue to live in your house for the rest of your life.
- Special Needs Trust – A planning document which enables you to leave assets to a disabled loved one who is receiving essential Supplemental Security Income (“SSI”) benefits while enabling your loved one to retain SSI eligibility. By doing so, the assets left in trust for your disabled love one may be used to cover whatever supplemental, yet qualify-of-life-enhancing, needs your loved one may have which are not necessarily covered otherwise by their SSI eligibility and payments.
- Dynasty Trust – A trust technique incorporated into many of the above documents whereby you may leave your assets to your beneficiaries upon your death in an asset/creditor-protected trust (whether the creditor is an existing creditor or later becomes an ex-spouse) that also provides for estate tax avoidance when your beneficiary passes away and has not spent all the money inherited from you.
Now that you have discovered how we may be able to help you with your asset protection planning needs through the use of trusts, please Contact Us with your particular inquiry and see if you qualify for a free initial consultation so that we may discuss your individual concerns and develop an estate plan that meets your needs.
If you would like to learn more about the asset protection services we offer, please visit our Asset Protection Planning with Limited Liability Entities page to read about protecting your assets from unforeseen claims and creditors. Or, please visit another one of our practice areas by making the appropriate selection at the top of the page.