Which United States jurisdictions allow for the creation of asset protection trusts?
Domestic asset protection trusts are permitted under the laws of Alaska, Delaware, Hawaii, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia and Wyoming.
What other areas of law should an estate planning attorney be familiar with before practicing asset protection planning?
In addition to a working knowledge of taxation and business entities, an estate planning attorney wishing to engage in asset protection planning should be familiar with general concepts of bankruptcy law and creditor/debtor law. Specifically, knowledge of how applicable fraudulent transfer/conveyance laws apply to proposed planning (either under the UFTA or UFCA) is absolutely essential.
Who should consider establishing an asset protection trust?
Asset protection trusts are typically established by individuals in high risk occupations (i.e., doctors and real estate developers) and very wealthy individuals that realize they are targets for creditors due to their net worth. Asset protection trusts can also be used in lieu of a prenuptial agreement.
Are there any tax reasons to establish an asset protection trust?
In certain situations an asset protection trust can be used to eliminate or reduce the imposition of state income taxes. An asset protection trust may also be used to remove assets from a grantor’s estate while still allowing the grantor to potentially benefit from the trust assets.
|The 2021 Florida Statutes|
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