Asset Protection
Everyone wants to protect their hard-earned assets for their future, their retirement, and their future generations. Sometimes, people are worried about protecting their assets from creditors; they want to protect their separate property in case of divorce, or they’re worried that a child will end up in a bad marriage or have personal problems that make them unable to manage money well. We work with clients on a variety of strategies to help protect their assets for the future. Those strategies might include traditional means such as insurance, LLCs, and other corporate entities. We add to those traditional plans with thoughtful analysis of different options such as retirement planning, strategic gifting, and in some circumstances, certain types of trusts. We also help with prenups, postnups, and living-together agreements. (We will never recommend hiding assets when there is an active claim against you, as that is a surefire way to end up with even heavier penalties.)
Insights
Should I put money into a trust to protect it from my creditors?
A revocable living trust does not protect money from the trustor’s creditors. Creditors still can access funds in a person’s revocable living trust. Even if you call it an irrevocable trust, creditors can reach it if you control it in Washington. This rule is different in some other states. Other strategies may work to protect assets from creditors, depending on the types of creditors you’re concerned about.
How can I protect my gift or bequest to my children?
Parents often are hesitant to leave assets to a child if they are worried the child may someday lose half those assets in a divorce. A good solution is for parents to give those gifts in a trust that is clearly the separate property of the child. The child can even be trustee of the trust, if the parents believe that he or she understands the importance of keeping separate property separate.
