Connecticut Asset Protection Attorneys

At the Law Offices of Ericson, Scalise & Mangan, PC, our team of experienced asset protection attorneys is here to assist with all of your asset protection efforts. One method of protecting your family members and ensuring their financial future is through an asset protection trust.

What is an Asset Protection Trust?

An asset protection trust is a trust established through a deceased person’s estate plan typically for benefit of a surviving child (ren). Although the term “asset protection trust” could generally describe many types of beneficiary trusts, it usually refers to a trust established for a responsible and healthy adult beneficiary. The trust is drafted to continue for the lifetime of the beneficiary, rather than end at a predetermined time or age of the beneficiary.

The beneficiary usually serves as sole trustee or has the right to name an independent trustee; hence, an asset protection trust is commonly referred to as a “beneficiary-controlled trust.”

This type of trust is used as an alternative to outright distribution when the amount of inheritance is expected to be substantial (generally more than $100,000). Its protective features are promoted as gifts to the beneficiary that cannot be obtained without formal estate and asset protection planning. These trusts can be a great asset protection tool for you and your family.

What are the Benefits of an Asset Protection Trust?

By receiving inheritance in a trust, rather than receiving inheritance outright, the beneficiary can protect assets from various threats:

• Estate tax protection. If properly structured, the trust assets may be exempt from the federal and/or state estate tax upon the death of the beneficiary. When calculating the taxable estate of the deceased beneficiary, the trust assets would not be counted.
• Creditor protection. The trust assets are shielded from the creditors of the beneficiary, even if insurance is insufficient to satisfy a judgment obtained by lawsuit. The trust can be drafted to provide enhanced levels of protection, if desired.
• Divorce protection. The trust assets are separate property of the beneficiary and may not be converted to community or marital property during marriage. This prevents an ex-spouse from penetrating the trust should the beneficiary’s marriage end in divorce.
• Family protection. The trust may be drafted to ensure that family assets pass to the next generation rather than to surviving spouses who may remarry. This protects the intent of the original owners, who may want the assets distributed to grandchildren.

Effective asset protection is essential when developing your family plan. The asset protection lawyers at Law Offices of Ericson, Scalise & Mangan, PC can assist with all of your needs.

Common Misconceptions About Asset Protection Trusts

Many Connecticut residents believe that asset protection planning is only for the ultra-wealthy, but that is one of the most common misconceptions. In reality, anyone with property, family members, minor children, or business assets they want to safeguard can benefit from working with an asset protection trust lawyer that Connecticut residents trust. Another misconception is that creating documents like a domestic asset protection trust means losing full control of your assets. While some protections require irrevocable trusts to satisfy legal requirements, a properly structured asset protection trust can be customized to allow you to retain certain powers, such as choosing or replacing a trustee, while still providing creditor protection under Connecticut law.

People also mistakenly believe that simply transferring assets to a family member or creating a basic living trust is enough to protect assets from lawsuits, creditors, or future claims. However, those tools do not provide the same legal protections as formal asset protection trusts drafted by skilled Connecticut asset protection attorneys. A comprehensive estate plan should include multiple strategies—such as family limited partnerships, trust assets, and long-term care planning-to ensure complete protection. Speaking with experienced asset protection lawyers can help clients protect wealth, preserve assets for the next generation, and avoid unnecessary estate taxes.

When Should You Consider Creating an Asset Protection Trust?

Life changes such as marriage, divorce, children reaching adulthood, business ownership, long-term care needs, or planning for retirement are all ideal times to consider establishing an asset protection trust. Working with an asset protection lawyer allows Connecticut residents to determine whether now is the right time to protect assets through proper estate planning, including options like domestic asset protection trusts, family limited partnerships, or irrevocable trusts. Individuals with business interests, rental properties, professional liability exposure, or personal wealth may be especially vulnerable to lawsuits and creditor claims, making early planning essential.

Even if you currently feel financially secure, no one knows what the future holds. Lawsuits, economic downturns, medical emergencies, or unexpected events can put your individual’s assets at risk. A personalized estate plan helps protect your property not only during your lifetime but also after your death, ensuring your family and heirs receive what you intend. With a proper protection trust, you can create legal structures that safeguard assets while still allowing you some control, depending on your goals.

Our estate planning lawyers help clients protect wealth, establish long-term strategies, and preserve assets for future generations. If you would like to explore your options with our legal team, contact us today to schedule a consultation and protect what matters most.

How is an Asset Protection Trust Established?

Depending on whether the provisions for the asset protection trust are contained in a will or living trust, the executor or trustee, as the case may be, will be responsible for creating the trust during the weeks or months following the original owner’s death. The process involves (1) formally appointing a trustee, (2) preparing a Certification of Trust, (3) applying for the Taxpayer Identification Number, and (4) opening an account in the name of the trust.

Who Should Serve as Trustee?

In many cases, the beneficiary will serve as trustee. However, if creditor protection is a paramount concern or if the beneficiary is not mature and responsible, the beneficiary should not serve as trustee. Rather, an independent trustee should be appointed. This enhances the level of creditor protection by eliminating the conflict of interest held by a beneficiary who also serves as trustee. If an independent trustee is appointed, the beneficiary may retain the right to remove and replace the independent trustee.

A flexible option is to name the beneficiary as the initial trustee and grant the beneficiary the power to appoint an independent successor trustee. This gives the beneficiary discretion to choose the level of creditor protection desired or needed.

Asset Protection Trust Lawyer Connecticut – Making a Difference for You And Your Estate

This is a brief summary of some of the features of an asset protection trust. Please feel free to discuss with us in greater detail. Our team at the Law Offices of Ericson, Scalise & Mangan, PC will help you develop an asset protection strategy that ensures your most valuable assets remain secure.

Contact an asset protection lawyer today to ensure your money and property remain protected, no matter what.