Estate planning is usually about protecting your assets for your beneficiaries on your death. Some states are now allowing asset protection trusts to be organized that go beyond estate planning. Here are some things to consider.
What Is Asset Protection Planning?
An asset protection trust is part of a financial plan that protects a person’s assets from creditors or legal claims. The grantor, the person who establishes the plan, can still benefit from the assets. However, the assets are guarded against seizure or bankruptcy. Wealthy individuals may use asset protection trusts as a form of a prenuptial agreement. The assets could not be seized in a divorce. Individuals in high-risk professions, real estate developers or doctors, may also use an asset protection trust to keep their personal wealth from being attacked in a lawsuit.
What Should Your Attorney Be Familiar With?
An asset protection attorney is much more than an estate planning attorney. Asset protection trusts are more for the living. There are many complex legal aspects to an asset protection trust. Your attorney who is helping you design your asset protection trust needs to understand estate planning. In addition, this attorney needs to know tax and bankruptcy law. There are legal ways to insulate assets without hiding them fraudulently. This can backfire on you if you are in a lawsuit.
What Questions Can You Ask to Choose an Experienced Asset Protection Attorney?
When you are interviewing lawyers to help you put together an asset protection plan, you need to establish their experience.
- How long have you been writing asset protection plans? This may be much different than how long they’ve been a practicing attorney.
- How much of your practice is dedicated to asset protection planning? Although most lawyers may not do asset protection plans every day, you want them to be handling these cases regularly.
- Can you provide references? Although your attorney may be bound by confidentiality, there are other professionals that should be able to speak to the attorney’s experience. A CPA or financial advisor should be able to offer recommendations.
- How do you handle due diligence when vetting off-shore trustees? Your hope is that the attorney has actually met with the bank or trustee, not relied on marketing material.
- Have you conducted lectures or provided educational opportunities on asset protection trusts? Good attorneys who are recognized in the field will have been asked to conduct seminars or served as a professor. This can tell you how the attorney is recognized in the field.
Do Your Due Diligence
Don’t accept any claims from an asset protection attorney without follow up. Contact an experienced asset protection lawyer, to help you protect your assets.