When Pennsylvania residents who have sizable estates want to plan how to pass their assets to their children or preserve them for future generations, there are a few methods for doing so. Proper estate planning might help their families to avoid probate and estate taxes. It also can help to protect their children if they are sued or get divorced.
One way to protect children’s inheritances is to set up trusts with the children named as the trustees. The trust documents should also name trust protectors, who are people who can step in to control the administration of the trust in case the trustee is sued or plans to divorce. A trust protector might be another family member. By having a trust protector step in to manage the trust, the assets contained in it will not be a part of the child’s marital estate and will not be reachable by judgment creditors.
The second type of trust that can protect the beneficiaries’ inheritances is an asset protection trust. This is an irrevocable trust that can be located on or offshore. With this, third parties are named as the trustees to administer the trust for the benefit of the beneficiaries. Finally, people with significant holdings can potentially avoid estate taxes by establishing dynasty trusts. The family will have the right to access the assets in the trust but will not technically own them. This could help the family to preserve their wealth for generations.
Strategic planning can help people to protect their assets for their children and future generations. People who want to learn about the different types of estate planning documents that fit their situation might want to meet with attorneys who have experience with these types of matters.