How Inheritance Protection Trusts Can Keep Assets in the Family

millman law group inheritance protection trusts

Inheritance protection trusts can help you pass on assets to your children and grandchildren.

Many people have spent a lifetime building up their assets, hoping they will have something substantial to leave to their children and grandchildren once they’re gone. Whether you are concerned about property, businesses, or wealth, inheritance protection trusts can help you keep those assets in the family. Trusts can help prevent instances in which your beneficiaries may be forced to dispose of the assets you left them. Your estate planning lawyer at The Millman Law Group can help you determine which trusts may be used to protect your assets and keep them in your family. 

Modern Asset Protection Trust

Some may believe that asset protection trusts are only for the very wealthy, but modern asset protection trusts are a flexible and popular tool for many individuals. A common type of asset protection trust is a Family Protection Trust. This Trust transfers assets to your loved ones, protecting those assets after the transfer.

When asset transfers are made outright, typically when someone utilizes a will in their estate planning, the assets are transferred to the beneficiary with no restrictions or protections. In that case, your loved one may be legally required to give someone else these family assets, for example, due to lawsuits, bankruptcy, or divorce

Heir Safeguard Trust

A Heir Safeguard Trust (HST) is designed to protect surviving spouses or children from future remarriages, creditors, lawsuits, or divorce. An HST can be combined with a Testamentary Trust, an Irrevocable Trust, or a Revocable Living Trust. The different ways to set up an HST allow clients with various budgets to establish these types of inheritance protection trusts. 

The Heir Safeguard Trust provides bloodline protection, so you can bypass in-laws to gift assets to grandchildren. For example, with a traditional Will, you may leave assets to your children after you die. But when that child dies, those assets typically pass to their spouse. 

The Heir Safeguard Trust lets you bypass that son- or daughter-in-law and set the funds aside for grandchildren. You may consider naming your in-law as a Trustee on behalf of the grandchildren, but the Trust clarifies that the funds are intended for the grandchildren’s benefit. This can also protect your assets if your in-law later remarries or has more children. 

Qualified Personal Residence Trust

This is a type of an irrevocable trust that holds the Grantor’s primary residence or vacation home as its only asset. If you have a family home dear to you, a QPRT may be an excellent option for transferring that property later.

These inheritance protection trusts allow you to keep the right to live in the residence or use the vacation home for a fixed number of years. While the property transfer to the Trust is a taxable gift, if you live to the end of the trust term, the value of the property plus any later appreciation passes to the Trust beneficiaries without inclusion in your taxable estate. 

Estate Planning Made Easy With Millman Law Group

Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs Trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.