Protecting Your Assets Has Just Become More Affordable
Asset protection planning is an essential component of the overall financial planning of any individual or family who has had the good fortune to build and maintain wealth. After all, if you have spent years working hard to build wealth, why wouldn’t you choose to protect your wealth against potential future creditors? For many individuals, the answer to this question is “cost”.
With almost 20 years experience in advising clients on asset protection planning, the international asset protection trust (APT) remains our most recommended and effective protection strategy. Yet, for many people who desire to implement the APT structure, the cost to establish an APT and the annual trustee fees have resulted in them turning to the less protective “domestic” planning structure, or worse, doing no planning at all.
Regarding the cost to implement and maintain an APT, one truth is self evident: The investment made by our clients to implement the APT may only seem high until they have to use them to protect their assets from future lawsuits. Nonetheless, for those individuals or families that are still uncertain as to whether having an APT is worth its cost, we are pleased to announce that we are now able to offer a new version of our existing APT, with all of the associated asset protection benefits of the traditional APT, but at a much more affordable price. This new “group APT” is essentially the same trust as our existing APT, but with one major difference: each group APT requires a minimum of four Settlors or creators (with a married couple being treated as one Settlor) and they can be related or complete strangers. Within the group APT, a subtrust (with separate accounting) is maintained for each Settlor. Yet the group APT, like the traditional APT, requires only one Trustee and one Protector. Because of these features, the cost to implement the group APT, as well as the annual trustee fees, are less per Settlor, as compared to the traditional single-Settlor APT.
To further keep the costs of the group APT low, as to all the Settlors, the group APT requires uniform dispositive provisions within the trust. For example, the group APT might include the following dispositive progression: Upon the death of a Settlor, that Settlor’s subtrust would be divided into a credit shelter trust and a Q-TIP trust in the event the Settlor is survived by a spouse, or in the event of no surviving spouse but surviving issue, then the Settlor’s assets would be held in trust for the Settlor’s issue pending their attainment of specified ages. If the Settlor is survived by neither a spouse nor issue, then the Settlor’s assets would be distributed as appointed by the Settlor in his or her last will and testament. Of course, alternative dispositive provisions may be used.
If the costs associated with implementing and maintaining an international APT has caused you to forego proper asset protection planning, then the group APT is an alternative worth considering.
We recommend our new group APTs for families, whose individual members have assets in excess of $1M they wish to protect. In some instances, the group APT may also be appropriate for close friends and/or business associates who meet the same financial requirements. For more information, contact Jeffrey M. Verdon, Esq. at (800) 521-0464.