How families can protect their wealth

On Behalf of | Feb 10, 2020 | Probate And Estate Administration

A trust protector may allow parents in Nevada and other states to guard against their children losing some or all of their inheritances. This legal tool can also be used to protect anyone else who may be a beneficiary or trustee. In an example, a parent has placed an inheritance in a trust that the child is both the beneficiary and the trustee of. This can be effective because it protects it from being considered marital property in the event of a divorce.

As the trustee, the child can have relatively easy access to his or her money. However, when certain criteria are met, the trust protector will become the trustee in place of the son or daughter. This may occur if a parent gets remarried or some other potential threat to the inheritance arises. There are many different types of trusts that families can use to protect their wealth now and in the future.

For instance, a dynasty trust allows family members access to assets that could compound over time without paying estate or gift taxes. Family members don’t have to pay taxes on these assets because they don’t technically own them. The use of such a trust can make it possible to keep the total size of an estate below the $11 million tax exemption amount.

Anyone who owns property may benefit from going through the estate planning process with the help of an attorney. Ideally, individuals will review their plans on a regular basis to ensure that it still meets their needs. Life events such as a marriage or divorce may require a person to alter the terms of a will or trust. Proposed or actual changes to the tax code could also trigger an estate plan review.