Determining who to get your money and property(assets) after you die can be challenging. You want to make sure your heirs get what is appropriate for them without unnecessary delays. You can use a living trust for this purpose because it’s very similar to a Will but with better advantages.
Any assets you place in a living trust don’t have to go through a long and expensive probate process as it is with a Will. This means your heirs will get what you apportion to them much more efficiently.
There are a couple types of living trusts, and your assets and debts are treated differently based on the type you choose. Can a living trust lawyer assist in asset protection? Continue reading to learn more about how a living trust works.
How Does a Living Trust Work?
A living trust is an estate planning tool that enables you to transfer ownership of huur assets to a separate fund while you’re still alive. Also, a living trust lawyer can help protect your assets by setting up a trust that holds your property.
The trust can provide instructions on how your assets should be managed and distributed, which can help avoid probate and minimize estate taxes. They can also provide guidance on how to structure the trust to protect your assets from creditors and lawsuits. It's always a good idea to consult with a lawyer to understand the specific laws and regulations in your area.
There are two types of living trusts: revocable and irrevocable. These trusts allow you to assign your property to your chosen heirs or organization. When you pass on, they will get the assets assigned to them.
Here’s everything you need to know about the two types of trusts:
- Revocable trust
A revocable trust allows you to amend it as often as you like before you die. Until your death, everything in the trust is still yours. When you pass on, the assets in the trust are declared part of your estate, and the trustee you assign controls the distribution of your assets.
After your heirs get their assigned property and assets, the trust then ceases to exist. However, with a revocable trust, your assets will not be shielded from creditors looking to sue. That’s because you remain in control of your trust while you’re alone, hence if you lose a lawsuit, and the creditor wins, the trust may have to be closed and the money transferred to the creditor.
- Irrevocable trust
An irrevocable trust cannot be changed or revoked after you sign it. Once you sign, everything listed becomes the property of the trust. This means you no longer have ownership over the assets so you won’t be required to pay taxes. Also, creditors seeking repayment of debt cannot chase after the asset placed in an irrevocable trust. However, if you sign an irrevocable trust with the intention of defrauding creditors, legal actions may be taken to reverse the situation.
There are different types of irrevocable trusts, including those specialized for funeral costs or life insurance. These kinds of trusts protect your assets from creditors since the properties in it aren’t yours anymore. You cannot be compelled by a judgment creditor to close the trust to reconcile any debt. The only exception to this rule is if fraud is involved.
Conclusion
At Citadel Law Firm, we have the best estate planning lawyer who can help you understand your options for estate planning and asset protection.
Our lawyers will examine your financial situation and help you arrive at the best estate planning strategy for you. With your full cooperation, we can devise better ways to assist in your asset protection.
Contact us today to learn more about our services!