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If you are one of the California residents who want to put together a financial legacy rather than just a will, you need to consider asset protection. This financial tool helps you protect the things you own from those to whom you owe.
A person in the public eye, business insiders, and really anyone who is well-to-do can benefit from protecting their assets. It is easy to become the defendant in a lawsuit. Moreover, poor financial decisions may leave you teetering on the edge of bankruptcy. The trust shields assets.
When you place property in the trust, you make an irrevocable decision. In simplest terms, you transfer ownership of the asset from yourself to the trust. A trustee now manages the assets. Therefore, be certain to select a qualified trustee for the asset protection plan.
If you worry about the possibility of a lawsuit, this type of asset protection is a good idea. It protects property from personal injury lawsuits and similar losses in court. Another advantage is the possibility of skipping probate after your death. Instead, your trustee will divide the assets in the trust as you directed.
On the other hand, remember that this trust is irrevocable. If you tend to change your mind a lot about what to include and what to keep out, it might be best to consider a different type of financial tool. As always, if you are unsure whether this type of estate planning is the right choice, consider discussing your thoughts with an attorney.