Asset protection trusts are defined as intentional defective grantor trusts. Therefore they treat the trust assets different for income tax purposes than for the purpose of estate tax and gift tax. The veteran is therefore always the grantor and never the beneficially.
In most cases, the residence or home of the veteran is usually his main asset. As long as he retains the home, it does not get included in his net worth administration eligibility. This is to say that it does not get counted as a resource if he were to qualify for the monthly pension benefit and sells it, the proceeds would automatically cut him off from the pension benefit scheme. This would be the case until he has spent down to an allowable asset level.
People have often established a living revocable trust thinking that they are creating an asset protection trust. This is not the case though for the revocable trusts. The fact that it is revocable means that if the grantor is sued, it will not protect the assets. It does not matter whether it was a family, a land or a living trust.
The irrevocable ones are however different. A revocable trust protects the assets in case the grantor gets sued unlike a revocable one. It acts as a trust for the assets but when it is established, moving property to be under it will mean that they are no longer yours. You will therefore not be able to control such assets and you can also not get them back.
Different states have signed laws which enable formation of a special kind of trust called the asset protection trust. The property in this case is protected and it also retains the holdings for many centuries. It also had numerous tax advantages. It is in the state of Alaska where it was first created and there were reasons for this.
All the states that are creating them do so with the intention of bringing in more money into their banking industry. Alaska as well needed to have a new source of investment in the state. They therefore allowed the trust to be formed since it offered a lot of protection. People normally put in a lot of money in Alaska because of the long period in which the property is protected, the tax advantages and the shield it also gives.
This benefit is however enjoyed by outsiders and people from the state in which the trust is authorized do not enjoy it. This is because the main aim of the states was to bring in money from other states into its own banks. Other states had to invent something unique to encourage people to invest in them.
Interested parties should however learn as much as they can about these asset protection trusts before making any decisions. Most have always feared handing away their property the way that the state expects them to. They feel that having a limited liability company coupled with a living revocable trust could provide the same benefits and it is less complicated.
In most cases, the residence or home of the veteran is usually his main asset. As long as he retains the home, it does not get included in his net worth administration eligibility. This is to say that it does not get counted as a resource if he were to qualify for the monthly pension benefit and sells it, the proceeds would automatically cut him off from the pension benefit scheme. This would be the case until he has spent down to an allowable asset level.
People have often established a living revocable trust thinking that they are creating an asset protection trust. This is not the case though for the revocable trusts. The fact that it is revocable means that if the grantor is sued, it will not protect the assets. It does not matter whether it was a family, a land or a living trust.
The irrevocable ones are however different. A revocable trust protects the assets in case the grantor gets sued unlike a revocable one. It acts as a trust for the assets but when it is established, moving property to be under it will mean that they are no longer yours. You will therefore not be able to control such assets and you can also not get them back.
Different states have signed laws which enable formation of a special kind of trust called the asset protection trust. The property in this case is protected and it also retains the holdings for many centuries. It also had numerous tax advantages. It is in the state of Alaska where it was first created and there were reasons for this.
All the states that are creating them do so with the intention of bringing in more money into their banking industry. Alaska as well needed to have a new source of investment in the state. They therefore allowed the trust to be formed since it offered a lot of protection. People normally put in a lot of money in Alaska because of the long period in which the property is protected, the tax advantages and the shield it also gives.
This benefit is however enjoyed by outsiders and people from the state in which the trust is authorized do not enjoy it. This is because the main aim of the states was to bring in money from other states into its own banks. Other states had to invent something unique to encourage people to invest in them.
Interested parties should however learn as much as they can about these asset protection trusts before making any decisions. Most have always feared handing away their property the way that the state expects them to. They feel that having a limited liability company coupled with a living revocable trust could provide the same benefits and it is less complicated.
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