Create A Child Asset Protection Or CAP Trust™ To Provide Asset Protection For Your Children


Released on: April 10, 2008, 7:25 pm

Press Release Author: The Mamola Law Firm

Industry: Law

Press Release Summary: The Mamola Law Firm recommends establishing a Child’s Asset Protection or CAP Trust™ for optimal asset protection for your children.

Press 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].

Most 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.

While 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].

Even 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.

To 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.

While 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 so.

The 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.

A 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.

Samuel J. Mamola provides estate planning for California residents including Los Angeles and Orange County.

Web Site:

Contact Details: Samuel J. Mamola
Estate Planning Lawyer
(800) 440-5294


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