Frequently Asked Questions About the Protection Trust

1. What is a Protection Trust?

A Protection Trust (also known as a Dynasty Trust or a Legacy Trust) continues for a long time for your children, grandchildren, and great-grandchildren. The advantages of a Protection Trust is it gives asset protection, divorce protection, tax protection, and creditor protection for your beneficiaries. Yes, it allows your beneficiaries to enjoy the assets. The purpose of estate planning is to shift value from the senior generation to the junior generations without exposing the wealth transfer to the gift tax, the estate tax, or the generation skipping tax. The Protection Trust is the best vehicle to accomplish this goal. It is really the best deal in town.

2. Why is it important to transfer assets into a Protection Trust?

All gifts and bequests should always pass into a Protection Trust to maximize protection for your beneficiaries. If you have sole proprietorship, you need an entity for asset protection, either an LLC, or a corporation. The entity of choice for estate planning is a protection trust for the same reason, tax savings, asset protection, and privacy.

3. Can my beneficiaries change the Protection Trust?

Although the Protection Trust is irrevocable, your beneficiaries still have the power to change it. Within the Protection Trust, you give each of your children a special power that allows them to decide where their trust assets pass to after their death.

W. Bailey Smith is a certified specialist in probate, estate plans, and trust law. He has created over 8,000 estate plans. (949) 833-8891