As a regular part of the preparation of a complete estate plan, we address how best to protect assets. This is a very broad subject, with several levels of planning. Asset protection begins with, and can be as simple as, a review of adequate insurance coverage. At the very basic level we use asset protection concepts, such as the homestead law and titling ownership of assets of a married couple as tenancy by the entirety.
Asset protection can be the thoughtful appointment of a trustee of a spendthrift trust. It also can be the deferral of control to more appropriate ages for the beneficiaries. Asset ownership can also be shifted into irrevocable trusts. For the next generation, we typically recommend the use of continuing lifetime trusts to protect the inheritance from divorce and creditors.
A more in depth strategy might utilize the advantages provided by other jurisdictions – like Alaska, Delaware, or South Dakota, or even foreign jurisdictions, like the Bahamas, British Virgin Islands, or Nevis – to protect assets from the reach of creditors.