Asset Protection Trust In Georgia

Asset Protection Trust Georgia

What is an asset protection trust in Georgia and how do they work?

In this article, you’ll learn about:

  • what an asset protection trust is
  • the purpose of them
  • their benefits
  • the types most clients have us set up
  • the rules for them
  • their limitations
  • better solutions

Let’s dig in.

Table of Contents

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Intro To Asset Protection Trusts In Georgia

Let’s cover some of the basics of asset protection trusts. 

What Is A Georgia Asset Protection Trust?

An asset protection trust In Georgia is used to protect your assets from:

  • creditors 
  • potential lawsuits

And they are a type of irrevocable trust.

This means that the trust cannot be undone. 

The assets placed in the trust cannot be retrieved by:

  • the grantor 
  • the beneficiaries

Make sure you hire experienced trust lawyers like ours. 

If something gets messed up, you can’t undo it. 

It’s permanent. 

(You can create a revocable trust, which can be undone. We’ve got you.)

And these trusts will protect you from:

  • creditors
  • lawsuits

There are some rules for asset protection trusts in Georgia. 

These rules say that the trust:

  • are not able to protect you from existing claims and lawsuits
  • cannot be created to defraud creditors
  • must have transfers made to the trust “in good faith

What’s The Purpose Of An Asset Protection Trust?

They will protect your assets from lawsuits and creditors.  

Let’s say you put a brokerage account into a trust. 

You no longer personally own that account. 

The trust is the new owner. 

You, legally, own nothing. 

This protects your assets in your trust from:

  • people suing you to get to your assets
  • people making claims against your assets

They won’t be able to touch them because they are suing you, not the trust. 

This can be particularly useful if you work in high-risk professions, such as:

  • doctors
  • lawyers
  • business owners 

They also allow you to minimize estate taxes going to our government.

What Are The Benefits Of An Assets Protection Trust?

The benefits of an asset protection trust In Georgia include:

  • Protection of assets: By transferring assets into a trust, they are shielded from potential legal claims or creditors. This means that even if you face a lawsuit or bankruptcy, the assets in the trust will be protected and not subject to seizure.
  • Estate planning: An asset protection trust can be part of a comprehensive estate plan, allowing you to transfer assets to your beneficiaries while minimizing estate taxes and other legal complications.
  • Flexibility: Asset protection trusts can be tailored to meet your specific needs and goals. This can include setting specific conditions for distribution, such as age or certain life events, or providing for the care of loved ones.
  • Privacy: Trusts are private documents and are not a matter of public record. This means that the details of the trust, including the assets it contains, are not accessible to the public.
  • Control: Depending on the type of trust, you can retain control over the assets in the trust. This means you can continue to manage and invest the assets as you see fit while enjoying the benefits of asset protection.

Types of Asset Protection Trusts In Georgia

Here are the types of asset protection trusts available in Georgia.

Domestic Asset Protection Trust

A Domestic Asset Protection Trust (DAPT) is a type of irrevocable trust. 

The purpose of a DAPT is to:

  • protect assets from potential creditors or legal claims
  • allow the grantor to retain some control over the assets

Unlike traditional trusts, a DAPT allows you:

  • to be a beneficiary of the trust 
  • to have some level of control over the assets

You can serve as the trustee or veto certain distributions. 

Self-Settled Asset Protection Trust

A self-settled asset protection trust is where you:

  • creates a trust 
  • serve as a beneficiary of the trust

You both set up the trust and put assets into it.

The purpose of a self-settled asset protection trust is to:

  • protect your assets from creditors and lawsuits
  • allow you to be the beneficiary of the trust

Self-settled asset protection trusts are typically set up in states with favorable trust laws. 

These are states like Delaware, Nevada, and Alaska. 

Third-Party Asset Protection Trust

Third party asset protection trusts are managed by someone else. 

An example of a third-party trustee is an estate planning lawyer

(We are trustees for many of our clients.)

The trustee of a third-party asset protection trust is responsible for:

  • managing the assets in the trust 
  • distributing them according to the terms of the trust document

The grantor can set specific conditions for distribution, such as:

This ensures that the assets get used in accordance with your wishes.

How to Set Up an Asset Protection Trust In Georgia

Here are the general steps for setting up an asset protection trust:

  1. Determine the type of trust: There are several types of asset protection trusts available, including revocable trusts, irrevocable trusts, and self-settled or third-party trusts. The type of trust you choose will depend on your goals and specific circumstances.
  2. Choose a trustee: The trustee is responsible for managing the assets in the trust and distributing them according to the terms of the trust document. You can choose a professional trustee or a trusted family member or friend.
  3. Draft the trust document: The trust document outlines the terms and conditions of the trust, including the beneficiaries, the assets included in the trust, and the conditions for distribution.
  4. Transfer assets to the trust: To receive asset protection, you must transfer assets to the trust. This can include cash, real estate, stocks, and other valuable assets.
  5. Fund the trust: Once the assets have been transferred to the trust, you must fund the trust to ensure it has sufficient resources to pay for ongoing expenses.
  6. Manage the trust: The trustee is responsible for managing the assets in the trust and ensuring they are invested and distributed according to the terms of the trust document.

You should consider working with an estate planning lawyer to set this up.

This will ensure that it is:

  • properly structured 
  • in compliance with state and federal laws 

Fill out the form on this page.

We will set up your estate plan to protect your assets. 

Read More: The Biggest Mistake Parents Make When Setting Up A Trust Fund

Advantages Of A Georgia Asset Protection Trust

Let’s look at some of the advantages of an asset protection trust in Georgia. 

Protection Of Assets

These trusts provides asset protection for your estate. 

You can protect your assets from lawsuits and creditors. 

This will safeguard your wealth for you and your family. 

Flexibility

Asset protection trusts can get customized to accomplish your specific goals. 

This includes things like distributing the assets to heirs when they:

  • get married
  • graduate college
  • turn a certain age

Estate Planning

This trust can be part of a comprehensive estate plan.

You can transfer assets to your beneficiaries and minimize:

  • estate taxes 
  • other legal complications

Privacy and Confidentiality

Trust documents are private. 

They are not public records like wills in Georgia are. 

The details of the trust (i.e., the assets it contains) are not accessible to the public. 

Limitations Of Asset Protection Trusts In Georgia

Here are some of their limitations

Self-Settled Trusts Are Voidable

These are trusts where you’re the grantor AND the beneficiary of the trust. 

This blurs the line of whether you or the trust own the assets. 

The Uniform Voidable Transactions Act (UVTA) determines this. 

They say that your self-settled trust is voidable. 

Let’s say you create the trust with the intent to hinder, delay, or defraud creditors.

 This makes your self-settled trust voidable. 

This allows creditors to:

  • challenge the transfer 
  • try to recover the assets

Fraudulent Transfers

Let’s say that you create an asset protection trust in Georgia to:

  • defraud creditors
  • avoid legal obligations (i.e., child support)

They could consider this a fraudulent transfer, meaning that:

  • your trust will get invalidated
  • your assets are subject to seizure

Statute of Limitations

Not every states’ laws are the same on asset protection trusts. 

An asset protection trust in Georgia won’t have the same levels of protection in another state. 

Other states’ laws may reduce the effectiveness of your trust.

Limited Protection

These trusts will protect you against future creditors. 

But not from existing creditors and lawsuits. 

Or from child support or alimony. 

Talk To Us If You Want To Protect Your Assets

If you have assets to protect, fill out the form on this page.

Our estate planning attorneys have the experience you need to:

  • pay the least in estate taxes
  • protect your wealth from lawsuits and creditors
  • distribute your estate how you see fit

Talk soon.

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