This week I've already written about asset protection for you and asset protection for your spouse. But another very important aspect of asset protection planning should be creating an estate plan that will protect the other beneficiaries of your estate from creditors, lawsuits, and divorcing spouses. This can be easily accomplished by setting up lifetime trusts for your other beneficiaries instead of leaving your property outright, in stages, or at specific ages.
But a word of caution - you'll need to be careful when drafting the actual language of the lifetime trusts and choosing who should serve as Trustees because without the appropriate "buzz" words (such as health, education, maintenance), or by requiring mandatory distributions of trust income or principal, or by naming the beneficiary as Trustee, in some states the trust assets will lose their protected status.
If you're in the process of putting your estate plan together, then you'll need to let your estate planning attorney know up front that asset protection for your beneficiaries should be built right into your plan. On the other hand, if you already have an estate plan but haven't considered all of the benefits of protecting your beneficiaries, then you'll need to sit down with your estate planning attorney to revise and update your current plan to include asset protection through lifetime trusts.
Asset protection generally must be done well in advance to be effective. Planning ahead for an inheritance is one of the easiest & most effective ways to provide asset protection.