For high-net-worth families, estate planning and asset protection planning is extremely important because that is the only way to eliminate (or minimize) taxes, the chances for a lawsuit and to protect the heirs. After all, a family has spent a lifetime building up their fortunes, and just because one passes away, does not mean that the family will not go on. Luckily, for these families, asset protection planning is an option, and there are several legal options that can help protect assets from creditors, taxes, failed marriages and death.
The most common trust used by attorneys that specialize in estate planning for high-net-worth families is the Delaware Trust, also known as a Dynasty Trust. This legal instrument is a perpetual trust that provides both favorable asset protection and tax treatment. Of course, this is not the only options (irrevocable living trusts, etc.)
Special Needs Trusts
Another type of trust commonly used is the Special Needs Trust. These trusts are specifically designed for vulnerable heirs, like those that are disabled. The trust holds assets for their benefit, but since it is separate from them, the disabled heirs would still qualify for government entitlements.
Becoming a business
Another way to protect one’s assets is to form a family Limited Liability Company or Family Limited Partnership. This will separate company and personal assets to protect them from creditors, lawsuits and, sometimes, ex-spouses.
For Bridgewater, New Jersey, residents, contact an attorney to craft an individualized estate plan. Everyone’s situation is different, but an attorney can craft a plan that will meet one’s needs. A specially crafted estate plan can ensure that one’s legacy is what they want it to be and not years of fighting and litigation between heirs and the government.