With a global pandemic facing every American today, now more than ever, you need to consider things you may have pushed off to a later date. It includes protecting your hard-earned assets for yourself and your beneficiaries. Doing so keeps your assets from evaporating by creditors, divorce and even predatory claims. Our Corporate Capital professionals encourage everyone to have a living trust and protect their assets with an asset protection trust during these times.
These trusts are created while you are still alive. Once you sign on the dotted line, it will be an enforceable document, whether it is revocable or irrevocable, and all trusts are one or the other. You can revoke or amend revocable trusts, but you can’t change an irrevocable trust once it is signed. With a normal estate plan, the assets in your name will be part of your estate, and your will authorizes the executor of your estate to transfer them over to the trustee for dispersion.
Why Have a Living Trust
-Lessens your estate taxes, saving your spouse money in taxes.
-Protects your minor children until they can manage the money themselves, often staggered over time.
-Protects your adult children from money mismanagement if the trustee keeps the money in trust for your child’s lifetime, dispersing the amount as needed.
-Maintains your assets in the family, for example, in the event of a divorce of a grown child.
-Protect your children’s assets if your spouse remarries by putting the assets in trust with a professional trustee.
-Protects the trust as a private document so that the value of your assets doesn’t become a matter of public record.
-Protects your assets should something happen to you and provides for you if you can no longer make decisions.
A revocable trust can be changed, altered, modified, and even revoked after you set it up, with the settlor usually holding greater control over the assets. For example, if you need to allocate a beneficiary’s interest, where the trust should be invested and determining if assets can be sold. A revocable trust can also be referred to as a living trust. What this means is that the maker of the trust transfers the title of a property to a trust, operates as the initial trustee, and can take the property out of the trust during their lifetime. This kind of trust is ideal for those looking to avoid probate. It doesn’t protect the assets in the trust from the trust maker’s creditors but does make it harder for them to gain access.
Nevada Asset Protection Trust
This Trust is created by Nevada Statutes and combines several valuable characteristics. First, the Trust is irrevocable and is a separate legal entity from the Grantor(s). Second, the Grantor(s) have full access to the assets of the Trust. They can put assets into the Trust, take them out, direct that they be sold or have the Trustee [who is the Grantor(s)] distribute money or property to the Grantor(s) and other named lifetime beneficiaries. After a vesting period of two years from date of transfer of an asset into the Trust, the asset is permanently in the Trust and cannot be taken by a Creditor. This Trust also acts as a Spendthrift Trust for its beneficiaries, in that it specifically prohibits any beneficiary from pledging their beneficial interest against a loan or as an investment. Although the Trust is irrevocable, the beneficiaries can be changed by naming the Grantor(s)’ revocable trust as the beneficiary of this Trust. As noted above, the Revocable Trust can be changed at any time for any purpose.
Essentially, this trust is a special tool to protect your assets on behalf of your heirs. It is created for your beneficiaries to prevent them from selling or promising away the trust interest, keeping the interest in the trust. This protects your beneficiaries from being beholden to their creditors until the trust property is dispersed from the trust over to the beneficiaries.
At Corporate Capital, we advise all business owners to prepare a living trust to protect and distribute their assets when they can no longer manage their financial and legal affairs due to death or disability. We can help you diversify your investments into multiple assets, protect you from market volatility, provide insurance policies that limit financial liability, and establish trusts like the Nevada Asset Protection Trust (NAPT). Contact our office at 855-371-0070 to learn more or to arrange for a qualified attorney to set up your living trust in Nevada. We look forward to helping your family navigate finances in these challenging times.