Two Tips for Asset Protection Planning

Estate planning has many aspects, from asset protection, to asset ownership, beneficiary designations to protection from future creditor claims. As a result, a number of strategies should be considered for your overall plan.

Protective Arrangements for Beneficiaries

When a recipient receives a gift, the question often asked is will the beneficiary be subject to pressure from a spouse or other individual to place the asset into joint names, to make gifts they might not make or make high-risk investments or loans? Educated clients can often set up an inheritance though a trust where they can have significant input as trustee or co-trustee, helping protect the assets from creditor claims. Estate plans often provide distributions to pay out at certain percentages at specified ages for this reason. While beneficiaries that might become elderly or have mental or physical infirmities are most often thought of as candidates for a protective trust, asset holders with several children and grandchildren may not honestly be able to tell their estate planner that there is no possibility for divorce, creditor, spendthrift or mismanagement that could ever apply to their beneficiaries.


The best way to ensure that the asset protection plan chosen is the best one for you is to make sure you understand the rules you are following, the strategies that can be applied and the risk associated with each strategy. Your advisor should document the nature and value of your assets and document which assets would be retained after transfers are made. Showing how your assets are expected to remain solvent after the transfer will help you defend against any allegations of fraudulent transfers. Obtaining a second, or even third and fourth opinion as to which strategy to follow can also help.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.