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, although it is connected to an offshore trust, 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 an existing Primary Quantum Trust, which is a fully registered offshore trust used by numerous clients.
The benefits of this simpler 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 (if your assets come under potential attack), there is additional work that must be done at that time. 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 foreign 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, we recommend using The Bridge Trust for clients who have over $3 million in protectable assets and using The Quantum Living Trust for clients with under $3 million in protectable assets. Importantly, neither of these trusts protect assets in connection with Medicaid or Veterans benefits, so both of these asset protection trusts are for clients who have no interest in Medicaid Asset Protection or Veterans Asset Protection, or clients who have no trusted lifetime beneficiaries, which is an important ingredient for the Living Trust Plus Medicaid and Veterans Asset Protection Trust.
Both The Bridge Trust and The Quantum Living Trust are powerful tools that, 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 stands as an individual offshore trust. The Quantum Living Trust is a registered Sub-Trust of the Primary Quantum Trust, which is an existing fully registered offshore Trust.
- The Bridge Trust has an offshore Trustee already appointed who has agreed to accept the Trust if needed in the future;
The Quantum Living Trust does not, and you will need to rely on the Primary Quantum Trust Trustee to find an offshore trustee if and when needed. - The Bridge Trust has all of the Know Your Client (KYC) and Due Diligence (these are banking requirements) done from the beginning. This takes more time but speeds up the process if the Trust ever needs to be used — meaning if your assets come under attack. The Quantum Living Trust does not have any of the KYC or Due Diligence completed, so all of that will need to be done if and when your assets come under attack.
The Bridge Trust is typically appropriate for larger clients with net worth over $3-4 million. The Quantum Living Trust is good for clients with protectable assets of less than $1-2 million and who are 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™ and individual LLCs for real estate assets. Additionally, The Quantum Living Trust is fully upgradable to The Bridge Trust in the future.
Print This Page
