Your Guide to How Does a Trust Work: (Wills, Trusts, and Asset Protection.)
What is a Trust? Your Comprehensive Guide to Wills, Trusts, and Asset Protection
When you hear the word “trust,” you might think it’s a one-size-fits-all tool. But trusts are more like different flavors of ice cream—each type serves a specific purpose. Whether you want to avoid probate in Oregon, save on estate taxes in Washington, or protect your wealth with an offshore trust, there’s a trust designed to meet your goals.
At Bradley Legal Corp, we specialize in national asset protection strategies that secure your assets from lawsuits and creditors, using advanced tools like the Bridge Trust®. In this article, we’ll guide you through the different types of trusts and how they fit into your estate planning and asset protection strategy.
What is a Trust?
A trust is a legal arrangement where a grantor transfers assets to a trustee to manage for the benefit of a beneficiary. Trusts help you:
• Avoid probate and costly delays in states like Oregon and California
• Control how your wealth is distributed after your death
• Shield your wealth from lawsuits and financial risks
• Protect assets through domestic trusts, offshore trusts, or hybrid Bridge Trusts®
However, not all trusts are the same. Below, we’ll explore some of the most effective types of trusts and their benefits.
1. Revocable Living Trust (RLT) – The “Vanilla Ice Cream” of Trusts
A revocable living trust (RLT) is a foundational estate planning tool and is especially useful in states like Oregon, Washington, and California, where probate can be time-consuming and expensive.
Key Features of a Revocable Living Trust:
• Revocable: You can change or revoke the trust during your lifetime.
• Avoids Probate: Assets in the trust bypass probate, saving time and costs for your beneficiaries.
• Maintains Control: You remain in control of the assets during your lifetime.
• No Asset Protection: Since you retain control, this type of trust does not shield assets from creditors or lawsuits.
Best For: Individuals and families who want to avoid probate, maintain privacy, and keep control of their estate.
For those searching “how to avoid probate in Oregon with a trust” or “what’s the difference between a will and a trust in California,” a revocable living trust is often the best solution.
2. Land Trust – A Custom Flavor for Real Estate Owners
A land trust is specifically designed to hold real estate for privacy and probate avoidance.
Key Features of a Land Trust:
• Privacy Protection: Your name is not publicly associated with the property.
• Avoids Probate: Like an RLT, real estate held in a land trust passes outside of probate.
• No Asset Protection: A land trust does not shield real estate from lawsuits or creditors. You must always remember that privacy and protection are different.
Best For: Real estate investors or homeowners who want to keep their ownership private and avoid probate but don’t need full asset protection. Land Trust are generally connected to LLCs for a base layer of protection.
For example, a client searching for “how to protect my real estate investment in Washington” might benefit from a combination of a land trust and LLC. Or skip the land trust and go straight to the asset protection trust if their main priority is protection.
3. Gift Trust – The “Tax-Saving Sorbet”
A gift trust is used to pass wealth to beneficiaries while minimizing estate taxes.
Key Features of a Gift Trust:
• Irrevocable: Once assets are placed in the trust, they cannot be reclaimed.
• Tax Savings: Helps reduce your estate taxes and shields assets from future estate tax liability.
• Control: You can specify when and how beneficiaries receive their inheritance, such as staggered distributions over time.
Best For: High-net-worth individuals looking to reduce estate taxes in states like Washington, where the estate tax exemption is $2.193 million (2024 exemption). These are ‘tax mitigation strategies.’
For those asking “how do I save on estate taxes in Washington” or “what is the best way to pass wealth to my children without taxes,” a gift trust is a key strategy.
4. Asset Protection Trust (APT) – The “Rocky Road” of Trusts
An asset protection trust (APT) is a powerful legal tool designed to protect your wealth from lawsuits, creditors, and unforeseen liabilities. These trusts can be either domestic or offshore.
Revocable vs. Irrevocable Asset Protection Trusts:
• Revocable APTs: Offer flexibility but limited protection since you retain control.
• Irrevocable APTs: Provide robust legal protection because the assets are no longer legally owned by you.
To learn more about the differences between revocable and irrevocable trusts, check out our full article here:
https://btblegal.com/blog-articles/f/irrevocable-vs-revocable-trusts-whats-the-difference
Domestic vs. Offshore Asset Protection Trusts
In the world of irrevocable asset protection trusts, there are two main categories:
• Domestic Asset Protection Trusts (DAPT): Created under U.S. state laws, such as Nevada or Delaware, offering asset protection within the U.S. legal system.
• Offshore Asset Protection Trusts (OAPT): Established in foreign jurisdictions like the Cook Islands or Nevis, which provide stronger protections against U.S. legal judgments.
For a breakdown of domestic vs. offshore trusts, click here:
https://btblegal.com/blog-articles/f/ultimate-guide-offshore-asset-protection-trusts-vs-domestic
The Bridge Trust® – A Unique Hybrid Solution
At Bradley Legal Corp, we offer a proprietary solution called the Bridge Trust®, a hybrid trust that provides the best of both worlds:
• Offshore Strength: The asset protection of an offshore trust.
• Domestic Simplicity: The tax and reporting ease of a domestic trust.
The Bridge Trust® remains domestic unless it’s needed to “cross the bridge” to offshore protection in the face of a legal threat.
To understand why the Bridge Trust® is the gold standard for high-net-worth individuals looking to secure their assets, watch this educational YouTube video.
Why Not All Trusts Are the Same
Just like different flavors of ice cream, trusts serve different purposes:
• Want to avoid probate and maintain control? A revocable living trust works best.
• Need privacy for real estate holdings? A land trust or asset protection trust are ideal.
• Looking to pass wealth while minimizing taxes? A gift trust reduces estate taxes.
• Concerned about lawsuits or creditors? An asset protection trust shields your assets—especially when paired with a Bridge Trust® for maximum protection.
At Bradley Legal Corp, we help high-risk professionals and high-net-worth clients navigate these options to secure their legacy and wealth.
Estate Planning and Asset Protection Services by Bradley Legal Corp
We provide comprehensive estate planning services for clients in Oregon, Washington, and California, including wills, trusts, and wealth transfer plans.
For asset protection trusts, including the Bridge Trust®, we represent clients in any State nationwide.
Schedule a Consultation Today
Your estate plan or asset protection strategy should be as unique as you are.
Schedule a free phone consultation with our experienced asset protection attorneys today at (888) 773-9399.
By: Brian T. Bradley. Esq.
