The Bridge Trust® has become one of the most popular and effective asset protection tools in the ever-changing world of Asset Protection. The Bridge Trust® works by allowing a fully registered Foreign Asset Protection Trust (FAPT) to be treated as a simple domestic grantor trust by ensuring that the Trust meets the 2-part test under the Internal Revenue Code 7701(A)(30)(E).
The Quantum Living Trust® is simpler in that it also has a connection to the offshore world, but it does this through a different mechanism. Instead of the QLT itself being a fully registered offshore trust (Like The Bridge Trust®), the QLT is created as a Sub-Trust of the Primary Quantum Trust, which is the fully registered offshore trust.
The benefits of this approach are that it costs less to set up and maintain The Quantum Living Trust® since it is not itself a fully registered offshore trust, there are fewer fees to the foreign trust company and no need to keep the registration current in the offshore jurisdiction. Also, since there is no offshore Trust Company involved from inception as there is with The Bridge Trust®, the Due Diligence and KYC (Know Your Client) documentation is greatly reduced.
These differences make the QLT easier to implement and set up, but since much of the work offshore is deferred, when we do need to use the QLT to protect assets, there is additional work which must be done. This would include the due diligence and KYC process as well as having the Primary Quantum Trust take protective actions. These actions could include removing the client as the Trustee of their QLT, making the Trust irrevocable, and potentially even decanting a separate trust from the Primary Quantum Trust specifically for the assets of the client’s QLT.
Since the work is deferred, it means additional expense and a longer process to use the QLT. For these reasons, I recommend using The Bridge Trust® for clients who are over the $1-2 Million in protectable assets and using The Quantum Living Trust® for clients under the $1 -2 Million mark.
This tipping point of $1-2M can adjust up or down depending on the client’s circumstances. For example, The QLT may be a better choice for a client with $1.8M in protectable assets, but who has sold their business and retired. Whereas The Bridge Trust® may be a better choice for a client with only $950K in assets, but who is actively growing their estate and who has more risk associated with their profession or business.
Both The Bridge Trust® and The Quantum Living Trust® are powerful tools which, when used appropriately, can be extremely effective in protecting client assets.
Below is a summary version of the difference between The Bridge Trust® and The Quantum Living Trust®:
- The Bridge Trust® is Registered offshore, The Quantum Living Trust® is not.
- The Bridge Trust® has an offshore Trustee already appointed and who has agreed to accept the Trust if needed in the future, The Quantum Living Trust® does not and we will need to rely on the Primary Quantum Trust Trustee to find one at the time it is needed.
- The Bridge Trust® has all of the Know Your Client (KYC) and due diligence done from the beginning. This takes more time but speeds up the process if the Trust ever needs to be used. The Quantum Living Trust® does not have any of the KYC and Due Diligence completed, all of which will need to be done if trust needs to be used.
- The Bridge Trust® stands as an individual offshore trust. The Quantum Living Trust® is a registered Sub-Trust of the Primary Quantum Trust, which is a fully registered offshore Trust.
The BOTTOM LINE is that The Bridge Trust® is appropriate for larger clients with $1-2 Million in net worth and still growing their estate. The Quantum Living Trust® is good for clients under than $1-2 Million in net worth, or who not actively growing their wealth.
The Quantum Living Trust® may also be used in combination with a holding company such as the Arizona Asset Management Limited Partnership™ (AMLP), as well as individual LLC’s for assets such as real estate. Additionally, The Quantum Living Trust® is fully upgradable to The Bridge Trust® in the future and 100% of the fee paid is credited toward the cost of The Bridge Trust®.
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