Wealth Preservation Trust

Without protection to safeguard assets, your wealth may be in jeopardy.

Financial risk is simply a fact of life. Without protection to safeguard assets, your wealth may be in jeopardy.

At The Private Bank at Bank of Albuquerque, one effective strategy offered is a Wealth Preservation Trust to protect principal assets of up to $1 million per individual –as well as the growth and income derived from those assets – under the tenets of the New Mexico Family Wealth Preservation Trust Act.

What makes the Wealth Preservation Trust so unique is that it utilizes bankruptcy exemption laws, making the trust difficult for creditors to attack, and allows the grantor the ability to retain the right to revoke the trust, in part or in whole. No other asset protection trust offers this much control to the grantor.

What are the requirements? In exchange for creditor protection, the law requires that an New Mexico trust company or bank is appointed as trustee and the trust hold a majority of New Mexico- based assets. Examples of New Mexico-based assets include New Mexico municipal bonds, New Mexico-based company stocks and mineral interests located within the state, along with many other assets. Since the requirement reads that only a majority of the account assets are New Mexico-based, a grantor could hold 51 percent of the account at funding in New Mexico municipal bonds and the remainder invested in other investments not considered New Mexico-based, such as a diversified equity portfolio.

This law allows each individual a funding limit of $1 million, which means that a married couple could effectively shelter up to $2 million of their wealth, all while never losing control of those assets.

One of the greatest benefits of this strategy is not only the protection of the initial $1 million, but any growth or income of the assets in the trust is also granted the same creditor protection if left in the trust.

The Wealth Preservation Act specifies who can be named as a beneficiary of the trust. This includes the individual’s spouse, children of the individual, children of the individual’s spouse, the individual’s parents or the parents of the individual’s spouse, qualified charities, or a trust that benefits one of these beneficiaries.

Simple planning techniques such as the Wealth Preservation Trust can help protect your wealth and limit your potential loss exposure, without compromising your estate and financial planning objectives. Call today for more information on how we can help you protect your wealth and your legacy.