How to protect assets for kids with financial issues.

How to protect assets for kids with financial issues.

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There are many reasons why parents may want to consider protecting their kids’ inheritance for them in an asset protection trust. Some of these include: They are bad with money; they are disabled and depend on government programs; they have creditor issues or face bankruptcy; they have lawsuits against them; or they are in high-risk professions for being sued. As you can see, the reasons can range from negative behaviors, to things beyond their control, to having achieved some level of success.

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What most of my clients do if they want to protect their kids’ inheritance is set up their revocable living trust so that when the child receives it, it is in an asset protected trust. The child can become a co-trustee of their trust at a certain age and can eventually become the sole trustee of their trust. Whether the “principal” of the trust can be invaded to satisfy creditors is entirely up to the trustee. So it can’t be touched by creditors or lost to divorce or bankruptcy.

Personally, I have always had my estate plan set up this way. My mom died when I was a little girl, and she didn’t have a plan in place. I always knew that I could die early too, that there was no guarantee I would survive to see my kids grow up. So I always approached estate planning from the place of wanted to make sure I created the best plan for my family. I also knew that even if I didn’t have a lot in assets, I had no idea how large my estate would be if I died. My mother didn’t have any assets at all, but since she was killed in a car accident, I got a large settlement.

I also know that the future we envision for our kids when they are small isn’t necessarily the future they will have. My own adult child has a serious illness that may mean she needs access to care and government benefits for the rest of her life. So I’ve had to plan accordingly. The asset protection plan I drafted when she was 12 years old would have protected her if I died before knowing she’d become ill.

I’m just saying—plan as best you can, because you never know where life (and death, and illness) will take you and your family.

If you want to get started on your estate plan, read about our estate planning services and schedule an appointment.

To your family's health + happiness.

~Candice N. Aiston

P.S. Want to get started slowly but surely, naming guardians for your kids? Check out our Guardian Plan kit.


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Candice N. Aiston is an Legal Planning Attorney for Estates + Businesses in the Portland, Oregon area. She helps people to prepare for a lifetime of security, prosperity, and guidance. If you would like to receive her free reports, please visit to sign up. Follow her Facebook page for daily planning tips:

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