Trusts And Asset Protection Strategies That Protect Your Money
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Protecting your assets essentially means keeping them out of probate court.
Upon death, assets such as cars, jewelry, real estate, heirlooms, and furnishings go to the state probate court for distribution. Typically, a judge assesses the value of your probate assets and reduces the total by money owed to creditors, as well as taxes and fees.
To avoid these unwanted costs, people often put their assets into trusts or other protective arrangements. Usually, when your assets are held by trusts, neither the courts nor creditors have access to them.
Hoover Rogers Law, LLP offers estate planning services to the Wichita Falls and Lawton area designed to get your beneficiaries the inheritance that you intended. Contact us now to see what our estate planning attorneys can do for you.
Texas and Oklahoma trust varieties
Texas and Oklahoma have some variations in estate planning and asset protection.
In Oklahoma, for example, you can create a domestic or foreign Asset Protection Trust, or APT. More than 30 states, including Texas, do not allow APTs.
These trusts offer a great deal of protection to your assets and are funded by real estate, money, business and recreational assets, and securities.
Trusts come in a variety of arrangements that impact the level of protection they provide. Some are more expensive to establish and maintain than others.
Here are just some of the trusts that Hoover Rogers Law can help you create.
- Living Trust — Also known as an “inter vivos” trust, this entity starts managing your assets while you are still alive.
- Testament Trust — This entity is established within the will, which can contain more than one testament trust. These are often created when you are expecting to continue to receive money after death
- Revocable Trust — In this situation, you control the trust and can change the terms and conditions of it.
- Irrevocable Trust — Once you put your assets into this trust, they are no longer yours and are managed by a trustee. Typically, assets held in irrevocable trusts are not subject to estate taxes.
- Credit Shelter Trust (aka Bypass or Family Trust) — This kind of trust provides up to, but not over, the maximum estate tax exemption to each named beneficiary. The remainder of the estate is transferred to your spouse, tax-free.
- Insurance Trust — Creating an irrevocable life insurance trust separates your payout from your taxable estate.
- Property Trust — Among other things, this type of trust makes sure that your real estate property is transferred to your spouse upon your death. Upon their death, the property is divided among your children as you see fit.
- Charitable Trust — In this arrangement, you leave behind money or property that is then transferred by a trustee to the nonprofit or other charitable organization(s) of your choosing.
- Generation Skipping Trust or Dynasty Trust — Through this trust, you can transfer substantial money to your grandchildren.
- Texas’ Rotten Trusts — This state-specific trust offers beneficiaries 30 days to claim the trust’s assets. In this way, the assets are not counted as part of your estate’s value.
- Oklahoma’s Domestic Asset Protection Trusts — Domestic APTs are not legal in all states, but they are in Oklahoma. Usually, their main goal is to protect your assets from creditors. These are irrevocable trusts.
Remember, once you put an asset into an irrevocable trust, it’s no longer yours. Those items, property, and funds now belong to the trust. You have almost no control over these assets anymore. You did, however, establish the terms and conditions of the trust and select the trustee managing it.
More ways to protect your assets
Trusts are important to asset protection, but they are far from the only method of keeping your money safe. Assets can also be protected by:
- Marital property ownership — It may be wise to put an asset or property in one spouse’s name over the other to protect it from creditors of a nontransferable debt.
- Limited Liability Companies or Partnerships
- Retirement Plans — In Texas, claims and creditors cannot touch money in a retirement plan
- Life Insurance and Annuities
- Homestead — Protects your home from being taken by creditors
It's your future. Let us help you get there.
Hoover Rogers Law attorneys create plans designed to minimize probate and estate administration costs and protect your assets from burdensome taxation.
Our law firm works hard to make sure the assets you’ve built up over a lifetime stay with your loved ones and beneficiaries.
Accidents happen all the time. It’s never too early to start estate planning. Contact Hoover Rogers Law, LLP to see how we can help you plan the future you want.