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| Protect your assets -- set up a trust | |
 hink trusts are just for the wealthy? Think again. They’re worth considering at any stage of your career. These versatile legal structures can put your money beyond the reach of creditors, whether the claim ensues from a malpractice case, an accident on your property, or a divorce. They can save your heirs (or your heirs' heirs) hundreds of thousands of dollars in taxes. In all kinds of trusts, you arrange for a trustee to manage certain assets for a beneficiary. Some trusts are revocable, which means you can modify or cancel them at any time. Others are permanent once you create them. You'll pay only about $500 to $2,500 to set up a basic trust. But more complex arrangements—such as those in which a foreign trustee takes title to your property to keep creditors at bay—can run tens of thousands. While that may seem like a lot, attorney Barry Engel, an asset-protection specialist in Englewood, CO, says it's not, in light of what you're getting. "Think of it as paying a single, up-front premium for an insurance policy that will protect your assets no matter what the problem," he says. "When you look at it that way, the price seems pretty reasonable." |
 
If cost isn't a sticking point for you, loss of control might be. When you arrange a trust, you relinquish at least some control over the assets. How much depends on the trust's nature. If you want asset protection, for instance, the more removed you are from the money, the greater the protection.
But there are ways to minimize that drawback. With certain charitable trusts, for example, you can serve as the trustee, which gives
you back control. Foreign trusts can also be structured as you maintain control, as well as the right to receive income and trust
capital.
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By Deborah Grandinetti |