For Asset Protection, Can an Inheritance Also be Directed to a Protective Entity on Behalf of a Beneficiary?

Certainly. And it’s often wise to do so. A testator who wants to safely bequeath wealth to a beneficiary should direct the inheritance to any entity that would insulate the inheritance from the beneficiary’s creditors. For example, the gift may be bequeathed through: 1) a domestic testamentary trust with spendthrift, anti-alienation and discretionary provisions; 2) an integrated estate planning trust internationally; or 3) a limited partnership or LLC. In each instance, the beneficiary can enjoy the full benefits of the gift or bequest as the beneficiary, partner or member of those entities. A beneficiary of a large inheritance must look ahead to protect their future wealth and suggest these possibilities to those from whom they anticipate gifts.