Trust Strategies for Effective Wealth Preservation

Wealth preservation is a hot topic right now. People are concerned about protecting their assets to provide for retirement and to protect their children’s inheritance. Some may find trust strategies for effective wealth preservation by consulting with their estate planning attorney.

What is wealth preservation?

Though the concept sounds simple – preserving wealth – the execution of wealth preservation strategies requires careful, knowledgeable planning. In fact, wealth preservation is the most important part of a successful wealth management plan.

Methods of wealth preservation include:

• Investing in exclusive real estate;
• Buying expensive collections like art, coins, or wine for example;
• Purchasing precious metals;
• Buying insurance policies;
• Establishing trusts.

How can a trust provide effective wealth preservation?

Wealth preservation can also be thought of as asset protection. Some trusts are effective at protecting assets from creditors, divorce, and civil judgments.

However, remember that not all trusts are created equal. For example, a revocable trust typically does not offer asset protection, while an irrevocable trust does. Always consult with an experienced attorney to understand your options and their consequences.

What type of trusts are available?

Trusts are always established for a reason. In this case, we are looking at trusts that help with wealth preservation:

• Irrevocable Trust. By their very nature, irrevocable trusts are difficult or impossible to change. The grantor – the person who creates the trust – transfers ownership of assets to the trust. Since the grantor no longer controls the assets, they usually are protected from creditor claims.
• Domestic Asset Protection Trust. This type of trust (a “DAPT”) is also an irrevocable trust. A DAPT typically has an independent trustee and may include spendthrift provisions. Some states, including Florida, do not allow the creation of DAPTs. However, DAPTs potentially can be set up in another state by non-residents of that state.
• Foreign Asset Protection Trust. This type of trust is similar to a DAPT, but it is established in a foreign jurisdiction outside of the United States.  Great care must be taken when choosing the proper jurisdiction, an appropriate trustee, and considering tax consequences.  However, these trusts have proven to be extremely effective asset protection vehicles.

It’s difficult to cover all available strategies for effective wealth preservation in this blog. Consulting with an experienced attorney is the best option for learning the trust strategies for effective wealth preservation that fit your circumstances.

Learn more about effective wealth preservation

The desire to protect your hard-earned wealth may be strong. However, desire is not enough – you need to take action today.

At Law Offices of John Mangan, P.A., we’ve helped many clients develop comprehensive estate plans that meet their goals and needs. We can set up an appointment for you if you just call 772-324-9050 or use our convenient Contact Form.

Located in Palm City, the Law Offices of John Mangan, P.A. also serves clients in Stuart, Hobe Sound, Jupiter, and Port St. Lucie.