The key concept in all estate planning is the preservation of the inheritance for its beneficiaries. This is known by the colloquial description “asset protection.”
It is far too easy in the 21st century economy for a large, valuable store to become a target for any number of liabilities, from market losses, to business failures, and to who knows what else.
The vehicle by which most people preserve their estate and its assets is called a trust. A trust is nothing more complicated than a legal entity which is managed by a trustee and has a directed purpose. Trusts have a variety of features. Among them is, of course, asset protection. Others include certain tax benefits, immunity from certain kinds of legal liability and various kinds of probate advantages.
Some estates are built on a family business. These kinds of estates often have some kind of business entity managing the operations of the company, and that business entity is also a separate legal entity for purposes of liability. Who owns the business is important, but the fact that the business itself is a separate legal entity confers some level of asset protection on the estate as well.
Setting up a trust requires the services of an experienced estates, wills and trusts attorney. It is often a good idea to engage the services of an experienced accountant as well, since there are occasional tax ramifications involved depending on the size and nature of the estate.
In many cases, a trust is necessary. For example if the assets of an estate will be distributed to minor beneficiaries, a trust is required since minors cannot accept an inheritance directly.
The main concept to remember is that a trust can be as flexible as its grantor wishes. The rules can be established in just about any combination and with any level of detail necessary to meet the needs of the estate, the grantors and those the trust is meant to protect.
Good planning is essential. Using a highly experienced attorney like Mindy Felinton is always a good first step. With the right strategy, you can protect your family and everything you’ve worked so hard to build.