Asset Protection for the Rest of Us | Estate Plan Pros
Protect your spouse, your children, and your retirement with an estate plan

It doesn’t matter if you live next to the railroad tracks or the Riviera, you too can have asset protection in your estate plan.  If you search for asset protection on the internet, you’ll come across some unbelievable bald face charlatans explaining how they can set you up with some complex legal documents that will provide “absolute” protection – don’t’ fall into their trap.  You’ll also find plenty of reputable firms discussing advanced strategies (read – expensive strategies) on how to decrease your exposure to legal risk.  But this post is about simple things that the rest of us can use, and don’t cost a fortune. 

Protect your Surviving Spouse with a Credit Shelter Trust

Often couples focus on keeping things simple for the surviving spouse.  But with a little extra planning, it is possible to provide added security for the surviving spouse.  Legally speaking, a deceased spouse has a distinct and separate portion of the estate (what you own together).  That share is their community property interest in the estate plus whatever separate property they may have had.  It is that share that can be separated, and given increased protection. 

It was common practice for estate planning attorneys to set this up as a matter of course when the estate tax exclusion amount was around $1 million because this strategy provided additional estate tax planning advantages.  This strategy is often called an “AB” or “ABC” Trust.  With a higher exclusion amount ($5.43 million in 2015) the estate tax advantage doesn’t apply to as many people. 

But the estate tax advantage isn’t the only benefit.  Families wishing to provide extra security for the surviving spouse from creditors, lawsuits, or a possible re-marriage, can take advantage of setting their trust up to create a separate trust consisting of the deceased spouses portion of the estate.  Blended families often use this strategy to take care of the surviving spouse, and preserve their portion of the estate for the children or heirs of the deceased spouse. 

Protect your Children with a Personal Asset Trust(sm)

Beyond avoiding probate, trusts can also provide added protection against creditors, lawsuits, and divorcing spouses.  If you don’t want to see your children’s inheritance in the hands of their ex-spouse, or disappear in the ever increasing predatory lawsuit age we live in, take a look at the added protection we can build into your trust for your children.

Protect your Retirement with a Stand-Alone Retirement Trust

Retirement Plans often make up the largest portion of wealth passed on to the next generation.  Unfortunately, people don’t realize that children inheriting a retirement plan have no restrictions on withdrawing the funds, and not only that, but the inherited retirement plan is completely available to any creditor or lawsuit.  This loss of protection is a relatively new development, coming out in the 2014 Supreme Court case, Clark v. Ramiker.  If you expect that your children will inherit more than $50,000 in an IRA, 401k or other type of retirement, take a look at the Stand Alone Retirement Trust.

Tags:Asset Protection Blended Family IRA

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Erik Hartstrom

Erik is the founder of Estate Plan Pros, a leading estate planning practice in Elk Grove.  Erik’s practice focuses on Estate Planning Law. In Estate Planning, Erik works with clients to make the process simple, so clients can focus on more important things. He is a local authority for specialized estate planning instruments, like Special Needs Trust, Irrevocable Trusts, or other focused documents. Erik has litigated, negotiated, and mediated the gamut of family law cases. With this unique perspective as a family law and estate attorney he can often spot issues otherwise overlooked. Prior to graduating he worked as a legislative analyst for a non-profit organization, and volunteered as a youth counselor. Erik currently participates in local politics and is an active member of his local church. Erik is very happily married and has two young sons. Together, his family loves to get outdoors and enjoy the varied activities the Sacramento region has to offer.


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