A Revocable Living Trust is an excellent estate planning tool for those who want to avoid probate and keep their estate private. Did you know, however, that your Living Trust is not safe from creditors, divorcing spouses and negligence lawsuits?
Why Not
When you create a Revocable Living Trust, you will remain as the Trustee and Beneficiary until you pass away or suffer a mental disability. If you become disabled, your successor trustee will step-up, while you remain simply as the beneficiary. While you are alive, you will have complete control and benefit of your assets. For this reason, these assets are considered part of your personal estate and can be available to satisfy a judgment creditor.
Another reason your Living Trust is susceptible to creditors, lawsuit plaintiffs and divorcing spouses, is that you can remove property from your Trust at any time. Throughout your life you will fund property into your Living Trust, and also remove it as you please. Because your Trust is revocable and you can remove assets, a judgment creditor could force you to remove an asset to settle your debt.
What To Do
Asset protection is important for you, your spouse and your children. If you have a Revocable Living Trust, you should consider additional planning methods to protect your property and your children’s inheritance. Asset protection is more complex than the basic creation of a Will or Living Trust. Your attorney will work with you to determine your lifetime financial goals and what you will need to leave out of protection for use during your retirement years.
Some asset protection methods include special retirement accounts trusts, Family Limited Liability Companies and Irrevocable Trusts for the benefit of your heirs. Keep in mind, once you place assets in an Irrevocable Trust, the trust cannot be amended or revoked.
Revocable Living Trust Attorneys
To learn more about living trust lawyers, get in touch with the trust attorneys at Anderson, Dorn & Rader. Call (775) 823-9455 or fill out the form below to get started.
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