What Assets are Protected?
Individual Asset Protection -
Historically owned assets, income, future assets, a business, cars, real estate, investments, royalties, stock, pets, bank accounts, insurance, collectables, equipment, inventory, equity, partnerships, an inheritance, savings for school, benefits for relatives, medical savings account, education accounts, boats, airplanes, and almost any other asset.
However, we say "almost" because you cannot protect an asset that is already at risk or pledged. For example a house is usually pledged for the mortgage and may be obligated to association fees. The trust would only protect the excess equity (if there is excess).
The trust is not supposed to protect against existing damages, pending lawsuits, existing liens, existing taxes, or other existing obligations, although it might actually do so. A trust is supposed to protect valuables that are not obligated, that have clear equity, or excess value after those obligations. Trust protection should be in place PRIOR to potential problems.
In the case of long term medical care, payment for assisted living, and medical insurance, many states require you to have the asset protection trusts in place for 36 months prior to insurance benefits.
Keep in mind that most trusts do not protect assets during your lifetime. There are many types of trusts and many have entirely different purposes. Historically, the typical family trust is only designed to become effective when the person dies. If you think otherwise, please read it again!
Business Asset Protection -
A business can be protected separately from your personal life. Like a corporation or a Limited Liability Company, your business can be isolated from yourself as an individual (including your credit report). A trust can usually do it better, with more privacy, and a trust does not expire or require yearly renewal.
You could go one step further and protect your inventory, cash, and equipment, from the day-to-day business operations, legal entanglements, and potential liability. A major consideration.
Protection can begin at any time. Be sure to select the proper trust and get legal advice before making decisions or agreeing to fees.