WHAT ASSETS ARE PROTECTED?
Historically owned assets, income, future assets, a business, cars, real estate, investments, royalties, stock, pets, bank accounts, insurance, collectables, equipment, inventory, equity, partnerships, an inheritance, savings for school, benefits for relatives, medical savings account, education accounts, boats, airplanes, and almost any other asset.
However, we say "almost" because you cannot protect an asset that is already at risk or pledged. For example a house is usually pledged for the mortgage and may be obligated to association fees. The trust would only protect the excess equity (if there is excess).
The trust is not supposed to protect against pending lawsuits, existing liens, existing taxes, or other existing obligations, although it might actually do so. A trust is supposed to protect valuables that are clear, or the excess after those obligations. Trust protection should be in place PRIOR to potential problems.
In the case of long term medical care, payment for assisted living, and medical insurance, many states require you to have the asset protection trusts in place for 36 months prior to insurance benefits.
Keep in mind that most trusts do not protect assets during your lifetime. There are many types of trusts and many have entirely different purposes. Historically, the typical family trust is only designed to become effective when the person dies. If you think otherwise, please read it again!
Protection can begin at any time. Be sure to select the proper trust and get legal advice before making decisions or agreeing to fees.