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Today, I’m going to answer a simple question: What is an asset protection trust? You’ll hear it talked about in different ways, and perhaps the most popular context is protecting assets to become eligible for Medicaid. But that’s not what I’m talking about today. I’m talking about protecting your assets from lawsuits, creditor claims, divorcing spousal claims, negligence suits, malpractice suits, bankruptcy, and other types of legal risks.
Historically, a person couldn’t set up a trust for their own benefit and have those assets protected from these types of creditor claims. However, about 40 years ago, this started to change. Today, Nevada and South Dakota are recognized as having the best domestic asset protection trust laws in the country. South Dakota, in particular, stands out as the premier trust jurisdiction in the U.S., and for good reason. While I won’t dive into all those reasons in today’s video, just know that South Dakota is our preferred jurisdiction for setting up domestic asset protection trusts.
So, what’s the big deal with an asset protection trust? It allows you to set up a trust for your own benefit. You’re able to use and access those assets, and they’ll be protected from creditor claims. This is different from other types of trusts, like the revocable living trust, which people are more familiar with. A revocable living trust does not offer this kind of protection.
If you’re looking for asset protection benefits, you need an asset protection trust, and it needs to be set up in the best jurisdiction possible to fully take advantage of the protections available.
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