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Does a Living Trust Provide Enough Asset Protection? By Jarom Hillery A living trust is a popular tool for estate planning, but clients frequently ask if these trusts can also be used as a tool for asset protection. As is often the case with legal topics, the answer is complicated. The term “living trust� applies to a trust that is created and funded with assets while the creator of the trust is still alive. The living trust is by no means a new invention. It originated in England in the 1400s as a means to help nobility avoid taxes from

the crown. The concept of a living trust followed settlers as they arrived from England. The first living trust on record in colonial America was created for Francis Fauquier, Governor of Virginia, in 1765. While living trusts have existed for hundreds of years, using a living trust as an estate planning tool is a relatively modern concept. Modern living trusts are most commonly used as a secure way to pass assets to future generations.

Generally speaking, a living trust focuses on providing easy management of and easy access to the property it holds. However, it also gives creditors access to the property as if you owned it yourself. A living trust will offer no asset protection until after the person creating the trust has passed away! If living trusts do not protect assets from a creditor, why are they so popular across the United States? Living trusts provide a relatively

Q4 • 2017 | TheProOrtho.com 31

The Progressive Orthodontist  

Q4 2017

The Progressive Orthodontist  

Q4 2017