Estate planning is important for those who want to make sure their money (and assets) are passed onto their heirs as opposed to being handed to their creditors.
A trust is an excellent way to accomplish this.
When you create a trust, you’ll be establishing a legal document that will transfer the ownership of your assets to the care of a trustee (most people who choose a revocable living trust will name themselves as the trustee, with a successor being named to take over after they die.)
The trust will also establish the trustee’s responsibilities along with the rights of named beneficiaries.
Benefits of an irrevocable trust
If you decide to establish an irrevocable trust, your assets will be protected from creditors. With an irrevocable trust, the trust creator will no longer legally own the assets that have been used to fund the trust. They also no longer have control over how those assets will be distributed. Ultimately, this will protect the trust maker against future judgments from future creditors.
It’s worth noting, however, that if you choose an irrevocable trust, the maker of the trust will be unable to modify it at a later date.
Although the specifications of this are a bit complex to explain fully in the context of a blog, if you have questions about how an irrevocable trust can help protect your assets, call us today at 303-267-1111 to schedule an appointment with one of our experienced estate planning attorneys.
We do, however, need to point out that if a court finds that the transfer of assets into the trust was done with the intention of defrauding creditors, the court can unravel the trust. This is largely due to the fact that the court sees this type of action as being fraudulent. In some cases, people who establish a trust under this type of circumstance can face legal penalties.
As such, when it comes to establishing a trust as a means of protecting your assets, it’s important you work closely with a trusted, experienced estate planning attorney to ensure the establishment is done correctly.
Difference between an irrevocable trust and a revocable trust
Lastly, if you choose to establish a revocable trust, this will not protect your assets from creditors. This is largely due to the fact that under a revocable trust, the trust maker will maintain ownership of his or her assets. As such, a creditor could petition the court to force the owner of the trust to terminate it and surrender all or part of their assets.
Have questions? Call the Law Network PC
At the Law Network PC, we understand that our clients have many things they want to consider when it comes to starting an estate plan. When you call our office, we’ll be happy to schedule a free consultation, so we can answer your questions and address your concerned.