Couples are usually advised to conclude a prenuptial agreement to make their assets safe in the case of divorce. A so-called “prenup” is a written agreement, which is created by the engaged couple before the marriage. This document usually lists all the assets and debts of each person and defines the rights in the case of divorce.
This kind of agreement is not judicially binding, but a court may take it into consideration. Prenuptial Agreements is not a new preventative measure and it tends to create a dark cloud over the marriage as well as the couples’ life, making people feel awkward to discuss this subject. Discretionary trusts, on the other hand, have been used for tax planning and asset protection for centuries. Using a trust preemptively is one of the most useful tools to protect your assets against a potential breaking marital down.
You may transfer your assets to trust and appoint yourselves as trustees. In this case you control all your assets and decide who is a beneficiary. This can be your spouse, children and grandchildren.
One more advantage lies in avoiding inheritance tax while you gradually get you resources out of your estate. Each of the couple can transfer up to $325,000 into a discretionary trust. In seven years these assets will be out of your estate and inaccessible for inheritance tax.
There are countless invaluable substantial benefits in using a trust instead of having that uncomfortable conversation about using a prenuptial agreement. Consult our legal professionals at the Morgan Legal Group PC – a team of highly qualified attorneys. We will check every step to save your possessions for your children or grandchildren or other beneficiaries.