What is a Trust – specifically a Lifetime Trust?

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What is a Trust?

A Lifetime Trust keeps the assets within the trust for the lifetime of the beneficiary. This trust avoids probate and has asset protection features .The majority of lifetime trusts distribute income and principal as needed for health, education, lifestyle maintenance, and support. This is typically the most protective type of trust, especially when co-trustees are appointed.

A trust is a legal way to safeguard your assets and secure the future of your loved ones after you are gone. A Lifetime Asset Protection Trust (LAPT) is designed to protect your loved ones and their inheritance from bad decision making and financial catastrophes such as divorce, serious debt, devastating illness, and accidents.

Different trusts provide different options to manage the assets in the trust and distribute those assets to your heirs. An LAPT can protect your children from bad decisions, being taken advantage of and an illness or accident. With a Lifetime Asset Protection Trust, you gift an inheritance to your children through the LAPT and the trustee of the trust owns the assets, not your children. In this way, your children are protected because they can’t lose assets that they never owned.

Divorce
In Illinois an inheritance is not considered marital property in a divorce division of assets. A lifetime asset protection trust makes it easier to separate inherited assets from marital property and in a separate account that is in the name of the trust.

Debt
A lifetime asset protection trust can have a ‘spendthrift provision’ that protects the trust assets from attachment by the beneficiary’s creditors.

Illness or Accidents
With an LAPT, the trustee can continue to manage the assets of the beneficiary if they become ill or incapacitated.

Generational wealth planning is not just for the wealthy. In fact, almost everyone can benefit from an estate plan. Estate planning allows you to give what you have to who you want, the way you want, and when you want and with the least amount of taxes and expenses possible.