Planning for future generations is an integral part of estate management, but asset protection trust planning is frequently overlooked, sometimes dismissed as too complex or unnecessary. However, there are compelling reasons to incorporate asset protection trusts into even the simplest of estate plans, particularly when it comes to passing assets to children and grandchildren. The specifics can be found atGimme Shelter: General Trust Planning for Future Generations.
Asset protection trusts, contrary to some misconceptions, are not exclusive to those in a ‘certain tax bracket’. They serve to ensure smooth wealth transition across generations in any income class, proving a powerful estate planning tool. They allow for flexibility in administration and distribution of the assets, protect assets from creditors, and can simultaneously provide both immediate beneficiaries and long-term legacy beneficiaries.
The complexity of trust planning is often seen as a hurdle, especially when legal professionals are to work with clients who may not understand the nuances. Indeed, this perception of complexity can be viewed as a challenge for law firms to provide tailored and comprehensible solutions in their legal advice.
Despite its apparent complexity, trust planning should not be so quickly dismissed. Not only does it provide a level of protection to assets, but it is also a proactive approach to estate management that enables smoother valuation, disposition and succession.
Estate planning attorneys have an integral role to play in educating clients about incorporating asset protection trusts into their plans. It is a potential growth area as more clients realize the immense long-term advantages that can be held by seeming to ‘overreach’ in the short-term, especially in the context of passing assets to future generations.