Every estate plan is not designed to accomplish the same objectives. Our clients have differing circumstances and goals, and there are a variety of different solutions to achieve a particular objective. This is one of the reasons it is wise to engage the services of a seasoned estate planning attorney when you are planning your estate. An experienced estate planning attorney will gain an understanding of your unique situation and assist you as you go forward with a customized estate plan that ideally suits your needs.
Many of our clients, especially during the economic climate we have experienced the last several years, are interested in asset protection. Nobody wants to lose assets, but asset protection is a higher priority for certain individuals. There are particular activities and professions that naturally expose people to a higher level of risk of lawsuits. People who own and rent real estate fall into this category, as a tenant could potentially sue if an injury arises on the premises and certain other circumstances are present. Physicians also have a greater need for asset protection given the possibility of being sued for malpractice.
Some people think that assets are beyond the reach of creditors when they are placed in a revocable living trust. This is not the case. Revocable living trusts are very commonly utilized in the field of estate planning. You convey assets into the trust, and you can access these funds while you are still alive and competent. After you pass away the beneficiary or beneficiaries that you choose when you create the trust receive distributions out of the trust according to your wishes as stated in the trust agreement.
The primary reasons many people create revocable living trusts is to arrange for asset transfers outside of the process of guardianship (also known as a conservatorship in some states) and probate. They are very useful for this purpose, but they do nothing to provide asset protection. In creating a revocable living trust, you as the grantor of the trust typically act as both the trustee and the beneficiary while you are alive. The beneficiaries that receive the assets after you pass away are the successor beneficiaries. You have total control over the assets of the trust. You can do what you want with them, and you can even dissolve the trust and have the assets returned to you at any time while you are alive and competent. You can also change the beneficiaries if you choose to do so. Because of this control, the assets of the trust are considered available to the claims of creditors under state law.
While revocable living trusts are not a solution for asset protection planning, there are numerous strategies that may be considered to protect your assets. Among these solutions are the Nevada Asset Protection Trust and the Nevada Limited Liability Company. If you would like to discuss asset protection with an attortney experienced in this area, feel free to contact our firm to schedule a complimentary consultation.