What is an Asset Protection Trust?

An Asset Protection Trust is a type of trust set up to protect a person’s assets from creditors. In West Virginia, this type of trust is set up to provide assets to a beneficiary or beneficiaries with limited protection from creditors. An Asset Protection Trust is similar to a revocable trust, but instead of protecting the assets after death, this type of trust can protect the assets while the beneficiary is alive. A person who sets up an Asset Protection Trust can be the beneficiary, but also the grantor—the person appointing the trust. As the grantor, they can control the trust assets, set guidelines for how the assets are distributed, and can also receive income from the trust. Because this type of trust is mainly used to protect assets from creditors, there are certain laws in West Virginia that prevent creditors from making the beneficiary liable for the debts of the grantor. This can be beneficial if the grantor dies and his or her estate is not large enough to cover the debts. An Asset Protection Trust can also be set up in a way that would provide financial support to the beneficiary in the event of the grantor’s death. In this type of trust, the assets are held in the trust until the grantor has passed away, and then they are distributed according to the grantor’s wishes. Overall, an Asset Protection Trust is a powerful tool that can be used to protect assets from creditors and can help provide financial security for beneficiaries in the event of the grantor’s death.

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