February 9, 2026
Most people think a simple will is all they need to protect their assets. The vast majority have what is called an “I Love You Will,” which typically says, “I leave everything to my loving spouse, and upon the death of my loving spouse, then to our wonderful children.”
This seems straightforward and protective enough on paper, but unfortunately, it is not. These types of wills fail to account for many common scenarios and do not effectively limit your tax burden.
In 2026, the federal exemption for estate taxes is $15 million per person. Therefore, a married couple can leave up to $30 million to the next generation without incurring federal estate taxes.
The vast majority of households are not leaving behind that amount of money and, as a result, have chosen to forego more sophisticated estate planning. They think, “If we don’t have to worry about taxes, why do we need anything more than a simple will?”
The truth is that taxes are not the only threat to a person’s estate, and asset protection is not only for the super wealthy. Strong consideration should be given to protecting any and all valuable assets.
What Can Go Wrong Without Proper Asset Protection
Suppose you have managed to accumulate an estate totaling $3 million, consisting of your home, investments, IRAs, and life insurance. There are two common scenarios that could compromise your estate if you don’t have the right protections in place.
If a Beneficiary Gets Divorced:
If you plan to leave assets to your children, it is important to consider how their lives may change as they get older. For instance, they may get married one day—but what happens to their inheritance if they later get divorced?
In that scenario, the assets you spent a lifetime accumulating could end up with an ex-son- or daughter-in-law through divorce proceedings (or with a future “outlaw,” as we say in the trade).
If a Surviving Spouse Gets Remarried:
In a situation where one spouse passes away, the surviving spouse may eventually decide to remarry. But what happens if they later get divorced or when they eventually pass away?
Without proper planning, some or all of the family assets could end up with the new spouse, thereby inadvertently disinheriting any children from your marriage.
If the thought of either of these situations concerns you, then you need to incorporate asset protection into your estate plan.
Types of Trusts to Help Secure Your Assets
Remember: Asset protection is not only for the super wealthy. Nearly everyone can benefit from building a “moat” around their estate, regardless of net worth.
One way to do that is through trusts. In particular, irrevocable trusts are a common tool used in estate planning to provide protection from the claims of ex-spouses, creditors, and even the IRS.
Let’s look at three types of trusts that can help secure your assets for your family.
1. Qualified Terminable Interest Property (QTIP) Trusts
In the simplest terms, a QTIP Trust continues to generate income for your spouse for the remainder of their life. They receive the proceeds of any interest, capital gains, and access to principal under certain circumstances.
Because the trust is irrevocable, the final beneficiaries cannot be changed, ensuring that the assets ultimately go to the children of your marriage and not any future ex-spouses.
2. Asset Protection Trusts
Most trusts are structured so that beneficiaries receive income and principal at set intervals—at ages 25, 30, and 35, for example. Once the assets have been fully distributed, the trust usually dissolves, and with it, any protection of those assets.
Unfortunately, that means if a beneficiary gets divorced at age 40, their spouse could end up with half of “your” assets.
The benefit of an Asset Protection Trust is that it does not have to dissolve after a set period, allowing you to safely leave money to your children forever and limit how much a future “outlaw” may be entitled to.
3. Life Insurance Trusts
Many people don’t realize that a trust can own almost anything, thereby safeguarding the assets. You can put a house, a car, a business, mutual funds, or even life insurance in a trust.
If you own a significant amount of life insurance, consider transferring ownership of your policy to a Life Insurance Trust. All the same asset protection benefits that we’ve discussed apply. But, in addition, when your life insurance policy is in a trust, the proceeds are typically not subject to federal estate taxes.
Making Sure Your Will Works as Intended
Once your will is properly designed and signed, you are still not done! It is crucial to coordinate the titling of your assets and the beneficiary designations on your 401(k) and IRAs with your new will.
If these aspects of your financial plan are not properly aligned, your plan may not work as intended.
It is recommended to work with a trusted financial advisor to create your overall financial plan. Ideally, that advisor will also assemble and coordinate with the other professionals required to fully implement your plan.
Learn about the Estate Planning and Asset Protection Process at Wealth Preservation Solutions.