Create A Child Asset Protection Or CAP Trust™ To Provide
Asset Protection For Your Children
on: April 10, 2008, 7:25 pm
Release Author: The
Mamola Law Firm
Release Summary: The Mamola Law Firm recommends establishing a
Child’s Asset Protection or CAP Trust™ for optimal
asset protection for your children.
Release Body: The Mamola Law Firm, [professionals]
in [estate] tax law, estate
planning, wealth preservation and asset protection, are pleased
to announce that a Child's Asset Protection or CAP Trust™
will provide better asset protection for your children than a
simple Living Trust [cannot].
people create a trust with the intention of shielding their assets
from inheritance taxes [and avoiding probate]. In most cases,
the trust is designed with the children as beneficiaries, and
the originators believe the assets will all go to the children
as intended. Certain events, however, can prevent this from happening
and the children's future can be severely damaged.
a [traditional] living
trust can transfer ownership of the assets to the children,
[those assets lack any asset
protection]. With a traditional living trust, the [child's
trust] assets are subject to seizure by current or future creditors
of the children, and this can substantially or completely [destroy
the child's inheritance].
the most careful children may end up liable for alimony payments
or child support payments, to which the [child's inheritance is]
vulnerable through a court order. Other creditors may also claim
the assets [inherited by the children], and this can happen as
a result of a failed business, back taxes, or lawsuits arising
from automobile accidents. [Your] Living Trust,
so carefully designed to provide for the children, may end up
enriching someone else at your children's expense.
protect against these possibilities, southern
California estate planning attorney Sam Mamola recommends
establishing a CAP Trust™ or Child's
Asset Protection Trust[™] instead of the typical
Living Trust. Either of these will transfer money
[for a child's benefit,] while keeping the funds away from any
possible future or current creditor.
the child remains in control of the funds as trustee, the child
is not the distribution trustee of the CAP Trust™.
As such, the child [lacks the formal authority to make any distributions
from the trust]. Since the child has no power under the trust
to make any distribution, no court can require him or her to do
distribution trustee designated by the conditions of the trust
can assign funds on a discretionary basis for the benefit of the
child and can choose NOT to make any distributions to the child's
creditors. The distribution trustee is not the child for whose
benefit the trust was established, but the child can [appoint]
a new distribution trustee at any time by removing or replacing
the existing one. As such, the child is the managing trustee for
the trust and can also control the investment of the trust's assets.
CAP Trust™ or Children's Asset Protection
Trust™ can be established with little more effort
than any other trust, but will protect your children in a way
no [traditional] Living Trust can. Please contact us today to
learn about wealth protection and the steps you can take to have
your beneficiaries receive the best possible asset protection.
J. Mamola provides estate planning for California residents
including Los Angeles and Orange County.
Details: Samuel J. Mamola
Estate Planning Lawyer