An asset protection trust , also called an APT, is a special type of trust that people use when planning their estate. APTs protect an individual’s estate and assets from creditors, lawsuits, and other judgments made against their estate and this is done by severing all connections between you and your assets. When you create an APT, you legally transfer the ownership of your estate and your assets to a separate trust that is wholly controlled by a designated Trustee. In short, you’re no longer the legal owner of your own estate.
There are several reasons why you may opt for an Asset protection trust . As mentioned above, APTs protect your estate from creditors, lawsuits, and other future judgments against your estate. For example, if you don’t want your ex-spouse to be able to open any judgments and change the terms of your trust, an APT may be the right choice for you. APTs are generally considered iron-clad, and once they’re in place, they’re very difficult to revoke or amend.
How an asset protection trust works
There are two main types of asset protection trusts: Domestic and Foreign. A Domestic APT is one of the easiest types of APTs to put in place, however they’re only valid in certain states. Domestic APTs protect people’s estates from lawsuits and creditors, so that if you’re ever sued, your assets will be protected. People who work in high-risk protections can benefit from Domestic Asset protection trusts .
Foreign Asset protection trusts, sometimes called “offshore trusts”, are generally held in offshore accounts outside of the United States. They’re more costly than Domestic APTs and they also have stricter privacy measures, offering the highest levels of protection and security.
If you’re a person with a considerable estate and valuable assets, an APT may be the best choice to safeguard your trust. Creating an APT may seem like a daunting process at first, but with an experienced estate planning lawyer you can create a trust that safeguards your estate and all of your assets. If you think you’d like to create an APT we recommend calling a trusted estate attorney who can discuss your options and guide you through the process.
For more information about setting up your asset protection trust, or if you have any questions about estate planning, please contact our team at SCC Legal today. Discover why so many people in NJ partner with us for their asset protection trusts and more.