Finding the proper tools for your estate plan takes much consideration. But once you complete putting it together, your estate plan can give you peace of mind knowing that you are able to protect your loved ones even if you are no longer with them.
One of the tools estate planners consider is asset protection trust (APT). While not all states permit them, APTs are enforceable in Oklahoma. So, what should you know about this type of trust?
The general overview: what is it?
An APT is a type of trust designed to protect one’s assets from creditor and lawsuit claims. Once the settlor creates the trust, assets in it will no longer belong to the settlor, which means that creditors cannot gain access and demand payment from the trust.
There are different types of APTs: domestic, foreign and Medicaid. The settlor can choose between the three depending on the goal for which they create the trust.
Can I modify the trust terms?
Unfortunately, the settlor can no longer make changes to or terminate the trust once created since an APT is an irrevocable trust.
How do I know if APT is for me?
Usually, APTs are beneficial for individuals with businesses to protect and those whose goal is to shield their assets from creditor and lawsuit claims. It is also good to note that APT creation does not come cheap. With the trust’s creation, you have to cover legal, administration, and asset management fees, which are computed depending on the trust plan’s complexity and asset value.
If you are considering APT as part of your estate plan, it will help you solidify your decision by considering your goals, priorities and financial situation.