Asset Protection Planning

Becoming an APT Beneficiary

You may not be a beneficiary of your own APT otherwise the trust's assets will be taxed when you and/or your spouse pass on. However, there are three options available that can be employed to permit you to have access to the APT funds.

• Borrowing: You could actually borrow the needed funds by giving the Trustee a note bearing market rate interest for a specified number of years, fully amortized or "interest only" with a balloon payment at the end of the term.
• Separate Property Transfer: If you are married, your spouse could transfer their assets to your individual assets (or vice versa) and transfer the combined assets to an APT. The non-contributing spouse would then be named a beneficiary of the APT and have access to the trust funds as long as you remain married and live together.
• Sale of Assets to the APT: You can sell property or assets to the APT in exchange for an interest bearing note over a specified period of time. Properly structured, there would be no income taxes on the sale of assets to the trust and you would only pay tax on any interest earned or capital gains (if any) for any sales of trust assets to third parties.

Back