Art of Asset Protection

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There is an art to protecting your assets. It’s simple – really. The secret is to not own your assets that you want protected. Once one understands this principle then it’s an easy decision to set up an irrevocable trust with the Ultra Trust® after that.

The art of asset protection is a delicate balance of control, non-ownership and tax strategies that, like a fine painting, allows for a certain amount of anxiety reduction and enjoyment. The first question one should ask is, “From what am I protecting assets?” Well, there are a variety of enemies to wealth out there including things like frivolous lawsuits, bankruptcy, torts, debtors, economic downturn, medical bills, and nursing home bills, among others. With all of these predators trying to take personal and business assets and the laws tilted in their favor, the path to asset protection is formed by a soft brush, not the heavy mallet of the courts.
The basic premise behind any asset protection plan is the art of not owning anything. It doesn’t matter if it is a business, a house, a sports car or a dog, you shouldn’t own it. A dog? Yes, a dog. A dog is legally a possession, so a dog has to be possessed by someone and that makes the owner liable for the dog. For example, a bunch of dogs are sitting around playing poker when a person comes in the door. One dog lunges and scars the person for life. Does the dog get sued or the owner? Can one avoid being sued as the owner? The short answer is, “no.” So, don’t own the dog. Give the dog to someone else and then just enjoy the dog. Won’t the other person be sued? Well, only if the other person is a person.
This is where the art makes an appearance. They way to protect something owned is to give it to an Ultra Trust®. The Ultra Trust® is a finely balanced instrument that allows one to have control without having ownership. Whether one is protecting personal assets, business assets or both, the Ultra Trust® provides a superior level of protection. Combine it with an LLC and the protection becomes twice as strong because there are two barriers between different assets.
There are other advantages. When it comes to estate tax and gift tax, the item placed in the trust is valued at the time it was put in the trust. This means that a small company, when placed in an Ultra Trust® can grow astronomically and never trigger the estate tax or gift tax when the trustee finally passes it on to the beneficiaries. Oh yeah, one more thing; With all of the assets placed in the Ultra Trust® years ahead of time, one can qualify for medicaid and not pay the outrageous nursing home bills that ruin estates every day.
An Ultra Trust® is a sophisticated placeholder for assets which specifies instructions on what the trustee (the person managing the trust) can and must do with those assets. The Ultra Trust® can designate who will get what assets and under what circumstances, such as in the event of marriage, college attendance, and or refraining from drugs and alcohol. It can also designate who doesn’t get anything, such as spouses of the beneficiaries, creditors and unrelated persons. The Ultra Trust® allows a grantor (the person giving to the trust) to have all of the control of the assets possible (such as the enjoyment of the dog) while leaving no ties to the assets that predators can use to take those assets. The artful construct of the Ultra Trust®, personally drafted for each client, allows for all of the benefits and the most protection.
Let’s take the dog example. One can easily place a dog in a trust by declaring the dog in the trust and possibly registering the dog as owned by the trust. Now the dog bites someone. The person the dog is living with doesn’t own it; the trustee doesn’t own it; but the trust does. So, the scarred person sues the trust and doesn’t get very much even if they win the costly lawsuit. In the meantime, the grantor enjoys the dog but not the risk.
A trust with a dog in it sounds like a silly thing, but the story illustrates how the Ultra Trust® can shield assets from an individual and from other assets. At Estate Street Partners, LLC a representative will artfully take your information and ascertain what you want your Ultra Trust® to do. Once the fortress is set up, the grantor can simply run his or her business and life without the worry of losing everything at any given time and enjoy the art that is all around them.
Category: Asset Protection

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