You’ve spent a lifetime building your savings, paying off your home, and investing in your family’s future. But one lawsuit, long-term care need, or unexpected financial setback could put everything at risk. What if there were a way to protect what you’ve worked for—without giving up control or access before you’re ready?
An asset protection trust (APT) is a type of irrevocable trust designed to shield your assets from future threats—such as lawsuits, creditors, or the high cost of nursing home care. Once assets are placed into the trust, they’re no longer considered legally “yours.” Instead, they’re owned by the trust and managed according to the terms you set.
This doesn’t mean you lose all access or benefit. The right trust design allows you to continue living in your home, receive income from trust investments when appropriate, or direct how assets are used for your spouse or family—all while keeping those assets out of reach from certain liabilities. At Alperin Law & Wealth, we often recommend asset protection trusts as part of our integrated planning strategy.
Why Would Someone Use an Asset Protection Trust?
Most people use asset protection trusts to preserve what they’ve built and pass it on to loved ones, rather than to courts, creditors, or the government. Common goals include:
- Protecting against long-term care costs. Nursing home care in Virginia can exceed $100,000 per year. If you need Medicaid to help cover costs, assets in an APT are typically not counted after a five-year lookback period.
- Avoiding probate. Assets in an APT pass outside of probate, helping your family avoid delays, court involvement, and legal fees after your death.
- Preventing lawsuits and creditor claims. Because the assets are no longer in your name, they are often shielded from legal judgments, business disputes, or creditor collections.
- Controlling how and when heirs inherit. You decide whether assets go outright to beneficiaries, are distributed over time, or are held for specific purposes like education, housing, or caregiving.
How Is an Asset Protection Trust Different From a Revocable Living Trust?
Both types of trusts help manage and distribute your assets, but the key difference is protection.
- A revocable living trust can be changed or canceled at any time, and you retain full control of the assets. That flexibility means creditors, Medicaid, and lawsuits can still access those assets.
- An irrevocable asset protection trust typically cannot be easily amended like a revocable living trust can once established—but that “irrevocability” is what creates the legal shield. Once assets are transferred in, they’re legally out of your personal estate and protected from most outside claims.
Who Should Consider Creating an Asset Protection Trust?
Asset protection trusts aren’t just for the ultra-wealthy. They’re especially helpful if:
- You want to protect your home from Medicaid estate recovery.
- You want to position yourself to access governmental benefits such as Long Term Care Medicaid or Veterans Pension Benefits
- You’re concerned about potential future lawsuits or creditor issues.
- You’re a business owner, landlord, or professional with liability exposure.
- You want to leave a secure legacy to children or grandchildren.
- You’re planning ahead for long-term care, not reacting in crisis.
At Alperin Law & Wealth, we help families weigh the pros and cons of asset protection strategies based on their individual goals, timelines, and risks. The earlier you plan, the more options you’ll have—especially with the changes that are coming to long-term care Medicaid under the One Big Beautiful Bill Act.
What Can You Put in an Asset Protection Trust?
Not all assets are ideal for this type of trust, but many can be protected, including:
- Your primary residence (especially if you plan to live in it for years)
- Vacation homes or rental properties
- Non-retirement investment accounts
- Bank accounts designated for savings or inheritance
- Life insurance policies
- Business interests or LLC shares
Certain assets, like IRAs or 401(k)s, may not be well-suited to trust ownership. That’s why we always evaluate your full financial picture before recommending a strategy.
When Should You Set Up an Asset Protection Trust?
The best time to set up an asset protection trust is before you need it. Once a lawsuit is filed or a health diagnosis triggers nursing home care, it may be too late to protect certain assets. That’s because of Medicaid’s five-year lookback period and other legal timing rules.
Early planning allows for:
- Full compliance with Medicaid eligibility timelines
- Maximum protection for your home and savings
- More flexibility in trust design and access
- Greater peace of mind during retirement
Think of it as insurance you create with a legal structure—one that pays off when life gets unpredictable.
You Don’t Have to Risk Everything You’ve Built
You worked hard for what you have. An asset protection trust helps ensure your legacy isn’t undone by one unexpected event. At Alperin Law & Wealth, we help clients design trusts that reflect their goals, protect their values, and adapt as life changes.
If you’re thinking about long-term care, concerned about lawsuits, or just want to ensure your family is protected, let’s talk. We serve professionals and families across Hampton Roads—including Virginia Beach, Norfolk, Suffolk, Chesapeake, and Portsmouth—as well as Northeastern North Carolina, including Moyock and the Outer Banks.
Schedule your discovery meeting today and start protecting what matters most.
