The first step in understanding how an Asset Protection Trust can benefit your family is defining what it is. In legal terms, assets are understood to be anything you own that has monetary value. The protection of these in the form of trust aims to avoid any seemingly unnecessary financial tolls which will have a detrimental effect on the beneficiary, and on you. In other words an Asset Protection Trust is exactly as it sounds; a legal method in which to protect your assets for the future.
Many people are under the impression an Asset Protection Trust is something only extremely wealthy households need, however those of moderate earnings may benefit even more from this type of security. Asset protection works differently depending on the state. In Florida, the state has made this type of trust quite attainable (its formal name is iPug) and it is widely becoming one of the most widely used estate-planning methods.
So how does such a trust benefit your family? Well, one of the purposes of Asset Protection is to ensure that the beneficiaries (in most cases, this is your family) receive as much of your resources as possible. This means that the trust is protected in the future from creditors and it can also avoid probate. Probate is the legal process that takes place after an individual passes away, during which the court ensures all their debts are paid and distributes their assets. This can be a lengthy, expensive procedure during which the family has little privacy or control. Having a will does not always mean you can evade probate, so setting up an Asset Protection Trust can be extremely beneficial.
Another positive that this type of trust holds is it application for Medicaid eligibility, as it helps to distribute your assets so you are not over the threshold for assistance, which can financially assist your family a great deal. Furthermore, the assets in this trust can be used in your retirement to provide a higher quality of life. Finally, there are tax benefits applicable to this manner of estate-planning.
All in all, there are many positive aspects for you and your family if you choose to put your assets into a protection trust. If you want to know more information, contact your legal representative.