Sydney Martinez is the beautiful daughter of an extremely successful businessman and a stay-at-home mother. Because they loves their daughter immensely, Sydney’s parents set up a simple plan in which she was to receive one third of her inheritance at 18, half of the balance at 25, and the full distribution at 30. Because Sydney is currently 26 years old, she has already received half of her inheritance, and is expecting the rest in just four short years.
Sydney was house sitting for her friend one night in a beautiful, fully furnished penthouse apartment in the middle of downtown Dallas when she heard a knock at the door. She was running a bath for herself when she left to answer the door. Distracted by another friend’s surprise appearance at the apartment and a spur-of-the-moment invitation to go out for the night, Sydney left the apartment—without her phone and without turning the faucet off.
Sydney arrived back at the apartment a few hours later around 2:30 AM, only to be greeted—not so pleasantly—by the doorman, who told her that the entire penthouse apartment had flooded. Not only had she forgotten to turn the faucet off, but the bathtub did not have an overflow drain or any other flood-prevention measures in place. The total damage to the apartment came out to just over $1.2 million. While the insurance company has paid for the damage, they are now seeking reimbursement from Sydney for $515,000.
Because her inheritance was set up as part of a traditional distribution plan, that reimbursement will eat up every penny of what is left of that inheritance. Sydney was now left with nothing, all because of a single, split-second mistake.
Lifetime Asset Protection Trust (LAPT)
So, is there a way to protect the inheritance that you are leaving behind for your loved ones? Fortunately, the answer is yes. If you set up a Lifetime Asset Protection Trust (LAPT), rather than a simple, traditional distribution plan, your chosen trustee can only make discretionary distributions. This means that rather than distributing the assets outright to your beneficiaries at any age, you provide that the trustee can only make distributions on a fully discretionary, up to the trustee basis—which also means that the assets are fully protected.
Why is LAPT important to you?
Setting up a Lifetime Asset Protection Trust is the best, most protected, and most airtight form of asset protection. The assets placed in the LAPT for your beneficiaries are completely protected from creditors, judgments and lawsuits, bankruptcy proceedings, and cannot be touched in the event of a beneficiaries’ divorce (i.e., the beneficiary’s spouse cannot reach his or her inheritance if they go through a divorce). This is because the beneficiary does not own the assets, and never will. A LAPT allows you to fully protect your assets and provides the utmost protection for you beneficiaries.
Springdale Law Group is one of a few law firms that ensure the well-being and future of yourself and your family by assisting in drafting, reviewing, and finalizing your Lifetime Asset Protection Trust (LAPT). As a comprehensive estate planning firm, we are proud to provide this essential service to individuals. Our team is fluent in English, Chinese, and Spanish and can assist with wealth management and estate planning in all 50 states. Don’t leave your own future to chance.
Contact us today and take the first step in securing a plan for you and your loved ones’ future and well-being in the event of the most unexpected happening to you. Let us help you make a plan that provides peace of mind before it’s too late.