Asset Protection Trusts for Los Altos Hills Residents

Start with the risk you are trying to manage

Before considering a trust, define the concern in practical terms. Are you asking about a particular asset, a possible future obligation, or how property will be handled as part of your estate plan? Those are different planning questions, and the right discussion depends on the facts of your situation.

A living trust is an estate-planning arrangement. Naming a trust does not, by itself, establish every claimed tax or creditor result. For a Los Altos Hills resident, the useful starting point is therefore the goal and the property involved—not the assumption that a particular trust label supplies protection.

• Identify the asset or category of assets that concerns you.
• Describe the obligation or risk you have in mind, including whether it is already present or only a possibility.
• Explain what you want the plan to accomplish, such as organizing estate planning or addressing a specific concern.

Review ownership, control and existing obligations

Before choosing an approach, gather a clear picture of who owns each asset, who currently controls it, and what obligations may already relate to it. These are questions to review with counsel, not a promise that changing ownership or control will produce a particular creditor outcome.

Be prepared to discuss the timing and reason for any proposed transfer, along with any obligations or disputes already on your mind. Do not treat a proposed trust as a way to make an existing obligation disappear. The practical question is whether the proposed arrangement fits your actual circumstances and estate-planning purpose.

• Make a private inventory of relevant assets and their current ownership.
• Note who makes decisions about each asset and any existing obligations you want to discuss.
• Bring questions about proposed transfers and their purpose before taking action.

Understand what a trust does—and does not establish

A trust can be part of estate planning, but simply placing an asset in a trust does not establish every tax or creditor result someone may claim. The result depends on the trust arrangement and applicable rules. Trusts are not a lawful means of simply eliminating income-tax obligations.

For that reason, an asset-protection goal should not be framed as a guaranteed shield. Discuss the limits of the proposed arrangement and what alternatives may better match your actual objective. Depending on your circumstances, the discussion may focus on estate planning rather than a promised creditor outcome.

• Ask what the proposed trust is intended to accomplish and what it cannot establish.
• Ask how the arrangement’s tax treatment would be evaluated under applicable rules.
• Compare the proposed approach with other ways of addressing the underlying planning concern.

Prepare for a focused planning discussion

A concise summary can make the first conversation more productive: list the assets at issue, their current ownership and control, the concern you want to address, and any obligations that may already exist. You can also write down what outcome you hope for and which parts are most important to you.

Codi M. Dada Law Office P.C. serves clients virtually throughout California from its one in-person office in Novato. A next step is to discuss your goals and circumstances and clarify whether a trust is an appropriate estate-planning topic for further consideration.