Estate planning is about more than just planning for the future. Depending on your situation, there are financial vehicles that can provide significant savings and protections now as well.
A revocable living trust won't protect you against creditors or give you any tax benefits, but it will make the transfer of property much smoother after death and can be changed at any time. Irrevocable trusts, on the other hand, provide not only protection against creditors and tax benefits, including an asset protection trust, but can also contribute to your legacy.
Revocable Living Trusts
A trust is a fiduciary arrangement through which you use a third party to hold and manage assets on behalf of one or more beneficiaries. A revocable living trust is the simplest and most common type of trust.
A revocable living trust provides rules for how your assets (the trust assets) are to be distributed when you pass away.
Irrevocable Living Trusts
Establishing a trust is one of the easiest and most powerful ways for you to make sure you have control over the distribution of your assets, even after death.
Put simply, a trust is a way to control property—who owns and manages it, and how it is handled and distributed. A trust is like a vault with a combination you create. You can put property inside it, and once it's there, you've got more control and peace of mind.
Asset Protection Trusts
The asset protection trust is one of the most powerful manifestations of an irrevocable trust. Unlike other irrevocable trusts, though, the asset protection trust is set up to benefit the trust's creator (called a self-settled trust). In short, an asset protection trust is a way for someone to relinquish legal ownership of assets—and thereby shield themselves from creditors, who can only reach assets of the debtor—but still benefit from the assets.