What is an asset protection trust?

An asset protection trust is a type of trust that is designed to protect assets from creditors, lawsuits, and taxes. It is a common legal tool in Washington’s Trusts and Estates Law. A trust is a legal arrangement by which property is managed by an individual or organization for the benefit of another. Asset protection trusts are used to protect an individual’s property from creditors, lawsuits, and other claims. They allow individuals to control the trust assets, but shield them from certain creditors and future lawsuits. Typically, when the settlor or creator of the trust passes away, the trust assets are distributed to beneficiaries. However, when an asset protection trust is used, the trust assets remain in the trust, and the beneficiaries cannot access them. This means that creditors or claimants cannot make claims against the trust assets, as they are not available. Asset protection trusts can be created in Washington by a licensed attorney who is experienced in Trusts and Estates Law. The trust must be carefully crafted to ensure that it follows all applicable laws and regulations. In addition, the settlor should retain an attorney to provide ongoing advice and guidance to ensure the trust remains valid. Asset protection trusts provide a powerful tool to protect assets from creditors and lawsuits. While they can be complex to set up, they can provide significant asset protection for individuals and their families in Washington.

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