Some Florida residents may be interested in setting up a trust for their beneficiaries. The type of trust that might be used varies. However, a trust is an effective way to care for loved ones if it is chosen carefully. An asset protection trust is one way the grantor could initiate trust planning so the assets intended for beneficiaries are protected. Such trusts are irrevocable, meaning that they cannot be revoked or altered. A third-party asset protection trust lets the grantor set up a trust that prevents creditors or ex-spouses from threatening the assets.
Asset protection trusts are designed to protect beneficiaries in a variety of situations. One such situation exists when the beneficiary is disabled. If the trust is given to the beneficiary outright, the individual could lose government benefits. If a special needs trust is used instead, the funds are used for certain purposes and do not interfere with benefits.
A situation might exist in which a grantor is aware of a beneficiary’s inability to handle money or in which the beneficiary’s spouse is potentially a risk to the beneficiary’s asset solvency in the future. Setting up an asset protection trust that limits the amount that is given to the beneficiary at any given time could protect their future financial status.
Another type of beneficiary who might need to have their assets protected is a spouse. Sometimes, the spouse does not have financial acumen or remarries, and that individual may unscrupulously deplete the assets. In addition, the spouse may need to receive care in the future and may not be able to manage assets.
If a grantor wishes to set up a protected trust, speaking to an attorney might be beneficial. The attorney may structure a protected assets trust that will keep the assets safe for future beneficiaries.