There are two ways to leave property to your loved ones. You can leave it: (1) Outright; or (2) In Trust.
- When you leave property outright to your spouse or children, you leave it to them with "no protection" from: Creditors (a lawsuit brought against them or a business partner, a bankruptcy), Predators (a divorce), or Themselves (youth, lack of financial responsibility, etc.).
- The best way to provide asset protection for your loved ones is to leave your property to them in a trust. These trusts can be structured to be very simple and flexible (leaving the beneficiary with full control), can contain significant detail to accomplish certain legacy goals (such as helping children learn to manage money well by providing them with structured distributions), or do just about anything in between.
- Trusts can be created through will-based estate planning, or living trust-based estate planning. There are advantages and disadvantages to both types of plans, and a qualified estate planning attorney will assist you with finding the right fit based on your individual situation. The only wrong decision is the decision not to plan.
With a proper estate plan, you can have full control over your assets during life (nothing changes) and give your beneficiaries the gift of asset protection by leaving their property in an ongoing Trust after you pass on.