You may think your kids’ inheritance doesn’t need to be protected and that they aren’t going to get sued. You may be right, but you may also be overlooking one of the most common “lawsuits” that causes inheritances to be lost everyday, and that’s divorce. If you want to protect the money you are leaving to your children from their future divorces, even if you love their spouses or expect you will, in the future, you can easily do so using a protected trust.
If your child is ever involved in a lawsuit, for example, a simple car accident, or if a business transaction goes bad, what you leave to your child can be protected from all future lawsuits or claims against them.
The best part is that if your child has their own taxable estate when they die, your planning now could save your family 40 cents on every dollar (or more) handed down from one generation to the next.
As of 2023, the current federal estate tax rate is 40% — meaning that every dollar passed on over the estate tax exemption rate is taxed at 40%. It has been as high as 55%. On top of that, many states have estate taxes as well.
This all adds up fast and can decimate your family’s financial legacy over time. For every million dollars you leave outright to your children, could result in your grandchildren receiving only $550,000, with $450,000 going to the government unnecessarily.
So, if you want to know that everything you’ve worked so hard to create will stay in your family for generations to come and not be lost to outsiders, leaving your assets to your children protected in a trust we call a Lifetime Asset Protection Trust is the way to go. It can be easily built into your existing estate plan or trust. You just need to ask us to help you get a Lifetime Asset Protection Trust added to your plan.
But how will my kids get to use what I leave to them?
Not only is what you leave protected, but your children control what you leave them when you decide they’re ready.
After your death, the assets you leave behind will pass to your children (and your grandchildren, great-grandchildren, and so on for successive generations) in a trust that your child can control as the trustee of the trust. You can decide when your child is mature enough to act as a trustee.
As the trustee of the trust, your child decides how what you’ve left is invested and what to do with the trust assets. Your child will even be able to determine the amount of control vs. the amount of asset protection he or she wants based on his or her specific circumstances.
Is this still important if I don’t have much money?
If you only leave your children a small amount of money, this is still incredibly valuable for protection. Some might say it’s even more important because your family has less to lose to taxes, lawsuits, and divorce each generation. And the impact of such losses is much greater.
A mere $10,000 protected now can become millions for the people you love for generations to come.
Imagine that you leave just $10,000 to your child in a Lifetime Asset Protection Trust. Instead of spending that $10,000 or losing it in a divorce, they invest that $10,000 in creating their own business inside their trust, and then grow that business into a million dollar or multi-million dollar venture, and it’s fully protected for generations.
Secure the future of your family today by speaking to us. We review estate plans and inherited funds with you, ensuring that all legalities are in place so generations can enjoy the benefits according to your wishes. Contact us today to get started.
AB Law, PLLC is a full-service business law and estate planning firm that serves clients throughout Texas. All consultations are free and no question is too silly, ridiculous, or complex. https://calendly.com/ablawpllc www.ab-firm.com