Law Offices of Boyd And Boyd, P.C.


The “Old Way” of Estate Planning

In most Living Trusts, beneficiaries receive their inheritance “outright” – – either immediately after you’re gone, or over a certain period of time, or at certain ages. In other words, your assets are distributed out of your Trust right into the names of your beneficiaries. However, by “owning” their inheritance, your beneficiaries are then exposed to:

  • the claims of spouses in divorce;
  • creditors claims;
  • lawsuits;
  • the loss of government needs-based benefits; and
  • potential estate taxes when their inheritance is handed down to the next generation of beneficiaries.

Consequently, it is very possible the loved ones to whom you are leaving all of your wealth may lose some, or even all that they inherit!

The “New” and Better Way

Instead of receiving their inheritance directly, each of your beneficiaries may instead receive their inheritance in a special trust, which springs out of your Living Trust. This continuing Personal Asset TrustSM (or “PAT”) can be controlled by each beneficiary in such a manner as to virtually give him or her all of the same rights as ownership, without the liability exposures ownership brings.

How the “PAT” Works

The beneficiary may be his or her own initial Trustee in control of his or her own Personal Asset TrustSM. The beneficiary may control the investing of his or her inheritance, how and when it is distributed and even who may receive it when that beneficiary passes away (if you wish, this right may be limited, such as only to your lineal descendants). The level of asset protection needed may be determined by the beneficiary after you’re gone with the advantage of “20/20 hindsight”, looking at the beneficiary’s circumstances at that time. For example, if a moderate level of protection is appropriate, an independent Co-Trustee may be brought in to co-sign on distributions. Or, if a greater level of asset protection is needed, an independent “Trust Protector” can “lockdown” the Trust even more tightly from the attack of third parties. In either case, the beneficiary may continue to indirectly control his or her inheritance, while enjoying additional asset protection.

The Flexibility to Adapt

Sometimes a plan may not work as originally intended because of changed circumstances or events you don’t anticipate. For example, you may have set up a restrictive trust for a beneficiary you did not feel was good at handling money or who was receiving government benefits; but later this beneficiary may prove capable or no longer require or be receiving government benefits, and the trust and its ongoing paperwork and expense may no longer be warranted. On the other hand, you may have provided for a beneficiary to receive their inheritance right away or at a certain age and when the time comes, the beneficiary is having drug or alcohol problems, or otherwise can’t properly handle his or her own affairs, or is receiving government benefits; in this case, you would want the trust to hold back the beneficiary’s distributions until the beneficiary is capable of handling matters on his or her own. Or, a lawsuit may be threatened against a beneficiary and it would be advantageous to take certain protective actions. Now you can add flexibility to your Trust by permitting your Trustee to bring in the “Trust Protector” to handle these situations, as you would have intended.

We Didn’t “Invent” It

The Personal Asset TrustSM is based upon over 100 years of Asset Protection Law. We have merely adapted and “imported this technology” for your Living Trust. This Personal Asset TrustSM is so unique that it is only offered by a small number of attorneys, who have taken the time to study it and the expense of updating their documents to include it.

Take Advantage of This Unique Opportunity

We have prepared an Amendment that can add this Personal Asset TrustSM to your Trust at only a fraction of the price for an Asset Protection Trust alone. If you have not yet added this “PAT” feature to your existing Living Trust, you should seriously consider doing so right away. We believe that it’s so important, we now offer the “PAT” as a standard feature in every new Living Trust vehicle we build!

Please note that the Personal Asset TrustSM does not alone guarantee “bulletproof” asset protection for your beneficiaries, but it does add much enhanced protection over the typical Living Trust’s provisions. Other, more advanced planning measures, such as Family Limited Partnerships or Irrevocable Trusts may be warranted if you desire an even greater level of asset protection.

F Keats Boyd

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