The asset that you are likely concerned about protecting above all else is your home. If you are interested in taking steps to keep your residence or even a vacation home out of the cross hairs of potential creditors or claimants, one viable course of action may be to place the home into a qualified personal residence trust (QPRT).
With a QPRT, your beneficiary will assume ownership of the property after the term of the trust expires, but you can live in the home rent-free for as long as you want to before the transfer takes place. Funding the trust with the home removes the property from your taxable estate, and also protects the home from anyone seeking to attach your assets.
While it should be noted that the gift tax comes into play here, there are tax advantages that can be realized through the utilization of this strategy. You are reducing the taxable value of the gift by continuing to live in the home. This retained interest is deducted from the taxable value, and in the end it will be far less than the actual true market value of the property in question.
Asset protection is particularly important for many people who, by virtue of their line of work, are particularly vulnerable to legal actions. If you would like to discuss a comprehensive asset protection strategy with an expert, take action right now to arrange for an informative consultation with an experienced, savvy San Jose estate planning lawyer.