How can an Asset Protection Trust age like wine and get stronger?
If you took the time to invest in creating an Asset Protection Trust to protect your assets then congratulations on taking a very important step in securing your financial freedom. Lets first remember that your Asset Protection Trust is a “Self-Settled Spendthrift Trust.” This means that you have Settled / created the Trust for yourself and have included “spendthrift” provisions in the Trust. This is an extremely unique trust that has proven itself to be effective.
It is critical to understand an important change that occurred in 2005 regarding the inclusion of the Trust assets in a Bankruptcy Estate. In 2005, Congress addressed the issue of when such a trust would be included in a Bankruptcy Estate. This was through a revision to the Bankruptcy code and is found at 11 U.S. Code section 548 – Fraudulent Transfers and Obligations.
This section of the Code very specially targets Self Settled Trusts, which is what you have. What this means to you is very important because IF your trust is LESS THAN 10 years old, then a Bankruptcy court may argue that your Trust should be included, if the can establish that the transfer was made with an actual intent to hinder, delay or defraud a creditor.
However, IF your trust is MORE THAN 10 years old, it is excluded by the terms of Section 548 fraudulent transfers and obligations on its face. The significance of this is that:
“if you have a trust which is 10 years old, (or will be) then you have the most powerful asset protection tool on the planet!”
If you haven’t yet started your Trust, do it NOW!
Time passes quickly and every day in which your trust has been active is working in your favor. Everyday you delay is working against you. Enjoy this recent media feature where we dive deep into the various tools of asset protection and Trusts. https://podcasts.apple.com/us/podcast/mindful-multi-family-show-76-chris-salerno-brian-t/id1478770123?i=1000487874678
By: Brian T. Bradley, Esq.
Senior Managing Partner
Bradley Legal Corp.
Asset Protection Law Firm