Asset Protection

How to Set Up a Family Asset Protection Trust

October 7, 2023
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8 min read

As you build wealth, including liquid capital, property, stocks, and other assets, you need to protect it. The more money you make, the more people will want to take it. You’ll need to watch for attacks from creditors, business rivals, aggressive lawsuit plaintiffs, or other parties.

Protecting your family’s assets, estate, and overall legacy isn’t a matter of simply putting money into a few different bank accounts. You need to know how to set up a family asset protection trust instead.

In fact, the right family asset protection trust can set up your family for long-term legal protection and financial stability – think decades instead of mere years. If you’re not sure where to start, keep reading. 

What is a Family Asset Protection Trust?

An asset protection trust is exactly what it sounds like: a trust instrument devised to protect assets rather than for other purposes, like inheritance transfers.

All asset protection trusts or APTs are irrevocable. In other words, when you transfer assets into an asset protection trust, the setup is permanent. The trust owns the assets, which are managed by the trustee. If you already have some legal experience, you might see how an asset protection trust is excellent for protecting assets from litigation and creditors.

By removing ownership of the valuable assets in question away from you and your immediate family members, you make those assets practically untouchable… provided you set up the asset protection trust correctly, of course.

Say you're an entrepreneur and, as your business expands, you attract the ire of one or another party. They try to sue you for everything you're worth. If you have a family asset protection trust set up, the assets stored in a trust could be safe from any litigation or creditor actions, no matter how aggressive.

That’s because, when set up smartly, asset protection trusts:

  • Can be under different jurisdictional rules
  • May not be touchable by the courts or creditors in your home jurisdiction whatsoever

A family asset protection trust is just an APT that you set up for your family’s estate or to-be-inherited wealth. For instance, maybe you have millions of dollars saved up that you want to pass down to your children, grandchildren, and great-grandchildren. Or maybe you have the family estate grounds and property you've purchased after a lifetime of successful work.

All those assets are vulnerable to creditors and lawsuits unless they are safely stored in an asset protection trust.

Why Use a Family Asset Protection Trust?

A family asset protection trust can be very valuable and useful. Many high-net-worth individuals, ranging from entrepreneurs to business executives to doctors to "old money" families, use family asset protection trusts for three big reasons.

Estate Planning

Although the primary goal of a family asset protection trust is defense, not estate planning, you can still use these instruments for estate planning purposes.

Because an asset protection trust is still a trust – in that it’s managed by a trustee, and the trustee is legally obligated to follow the trust instructions/grantor’s will – you can use this instrument to ensure that assets are in a particular place up until a particular time, or to ensure that assets are passed down to the right person.

Say you have several grandchildren, and you want them each to have an equal part of your estate. With a family asset protection trust, you can make sure that the estate is safe and sound until those grandchildren come of age, then also use the same trust to ensure that each grandchild receives their portion of the collective assets.

When you work with asset protection trust experts at Dominion, we can use these effective, versatile instruments for multiple goals simultaneously, not just one.

Build a Legacy

In a broad sense, a family asset protection trust can be used to help build a legacy for your descendants for decades to come.

Building a business empire isn't always about short-term success. Lots of high-net-worth entrepreneurs want to build something that will last for generations. You can do that with an asset protection trust.

You can take your hard-won money, property, and other assets, put the most valuable things into an asset protection trust, and ensure that each successive generation after you pass away will receive something on which to build their own businesses or ventures.

Protect Assets for Distant Beneficiaries

As touched on above, the biggest reason to set up a family asset protection trust is to protect assets for any distant beneficiaries you may wish to help later on.

With your assets secured in an offshore AFT (offshore in the sense of meaning in some country other than the US), they won’t be subject to claims against your name or your business. As far as long-term, legally ironclad protection goes, you can’t beat a family asset protection trust.

So long as you set the trust up properly, decades can pass and creditors or lawsuit plaintiffs won’t be able to touch the assets stored inside.

Steps to Set Up an Asset Protection Trust for Family

Like other trusts, a family asset protection trust can only be set up by a lawyer, who draws up the paperwork and ensures that it is legally binding in the way you want. But to really ensure that your family’s assets are secure practically in perpetuity, you’ll want to follow these specific steps.

Contact APT Advisors and Legal Experts at Dominion

First, contact our legal experts at Dominion right away. Dominion specializes in asset protection trust set up for high-net-worth individuals like yourself. We know the risk that comes with accumulating wealth, and we also know the best ways to protect that wealth for decades to come.

With our assistance, you’ll set up your offshore APT in the right jurisdiction, which will insulate your assets from attacks originating in the US (or any other country of concern). You’ll also know how to choose the right trustee to manage your funds, estate, and other assets secured within the trust.

Choose Your Trustee and Name Beneficiaries

The trustee is the most important party in the asset protection trust. After all, they'll manage the estate and the trust, plus make sure that the trust assets are distributed properly. If you want your asset protection trust to generate income or you want the assets within to appreciate, the trustee will be responsible for that work, as well.

Dominion’s advisors can help you name the right trustee. For maximum protection, the trustee should be a neutral third party, not someone you know personally or can exert your influence over.

At this stage, you’ll also need to name any beneficiaries. Our legal advisors can ensure that you name the right beneficiaries based on your legacy goals and which assets you plan to store the trust in the first place.

Determine Asset Management Strategies

Next, you’ll need to work with the trustee to determine your asset management strategies (e.g., maybe you want the assets in the trust to earn money over the years, as described above). 

Once more, Dominion’s advisors can help you develop an asset management and protection plan that simultaneously defends your assets and enables your assets to work for your goals. If you choose the right trustee, this should all go off without a hitch.

Of course, you’ll need to consider tax implications before making final decisions. Tax implications can be complex, particularly if you set up a protective offshore asset protection trust. After all, the tax laws can be very different from country to country. But if you work with Dominion, rest assured that our advisors will help explain the differences and ensure your plan is set up smartly.

Transfer Your Assets

Last, you’ll transfer the assets you want to protect into the asset protection trust. This can include cash, securities, limited liability companies, real estate, intellectual property, aircraft – the sky’s the limit.

If you’ve set up the trust correctly, you’ll have plenty of assets left over to live in comfort, to pursue further business ventures, and to tackle your other long-term entrepreneurial goals, but you’ll also secure wealth, property, and other estate assets for your family.

Think of a family asset protection trust as a shielded vault against future hazards. Only under the right circumstances and by the right people can the vault be opened. There's no better way to give your future family a protected gift than with an APT.

Don’t Set Up Your Family Asset Protection Trust Without Guidance

Overall, your asset protection trust must be set up with the right paperwork, the right plan, and the right expertise. That’s why you should only get started with Dominion at your side.

Not only do we have extensive experience in this industry, but we also have the full legal and financial infrastructure necessary to get your family APT up and running ASAP. With our assistance, you’ll determine:

  • The best jurisdiction
  • The best banks
  • The best strategy for your long-term and legacy goals

Get in touch with one of our representatives today.

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