Some people who are creating an estate plan may want to consider an asset protection trust. An APT may be a revocable living trust or an irrevocable trust. Irrevocable trusts might be foreign or domestic. While South Carolina does not allow domestic APTs, there may be alternatives that an individual could discuss with an attorney.
The person who sets up the trust is known as the settlor. With a revocable living trust, the settlor can make changes to the trust or even rescind it. While it can be a useful vehicle for people who want to retain control of their trust, it does not offer as much protection as an irrevocable trust. Creditors can still seize assets that are in a revocable trust.
The assets in an irrevocable trust cannot be seized by lawsuits or creditors. However, creating an irrevocable trust does mean that the assets are removed from a person’s estate and placed in the control of a trustee. A foreign APT or offshore asset protection trust actually places assets beyond the reach of U.S. jurisdiction. Asset protection trusts can also protect assets for beneficiaries. They are flexible enough to allow many different types of property to be placed in them, such as bank accounts, vehicles, cash, real estate and more. An attorney can assist in setting up an APT.
There may be situations in which an individual sets up a trust or creates a will as part of an estate plan, but family members feel they must contest it. This could happen if they think the person was unduly influenced by another person or if they think the person was not of sound mind at the time they created the trust. People who believe this may be the case might want to talk to an attorney about how to proceed.