A person usually uses an asset protection trust to protect all the assets that are being passed on to his or her heirs. The trust is irrevocable in nature and therefore, should be used only if you are certain because if you have any financially difficulties after establishing the trust, you will not be able to get your hands on the assets placed in the trust.
In New York Asset protection trusts are often used by people to protect their assets from the negative effects of divorce, bankruptcy or taxes. Although a trust may be established in the person’s home country, it is possible to have it challenged legally for various reasons.
The trust is created to protect the assets of the owner from creditors and claimants. The trust assets are transferred to a trustee who manages them for the trust owner and the beneficiary. This trust usually has no tax implications, depending on where it was established. It gives both the beneficiary and the owner privacy. In certain jurisdictions, the beneficiary must provide more evidence in order to claim the assets.
By setting up this trust, the person ensures that his or her assets are safe from creditors and claimants. The assets in the trust are transferred to a trustee, who manages the assets on behalf of the owner of the trust and his or her beneficiary.