How Living Trust Attorneys Can Safeguard Your Assets For the Future

A trusted living trust attorney can review your assets and recommend a plan that includes a revocable trust. A trustee manages the trustmaker’s assets, and the beneficiaries receive the trust benefits.

Asset Protection

In recent years, lawsuits against individuals and businesses have skyrocketed. The inability to predict when or if a person will become subject to legal liability is one of the major reasons why asset protection is so important. If a person becomes a defendant in a legal claim, their assets may be subject to claims by creditors. An experienced attorney can help them arrange their assets to protect against this risk while ensuring their asset exemptions will hold up in court.

The most effective way to protect assets from creditors is to transfer them into a trust, which can shield these funds from claims by creditors. A belief is a legal entity managed by a trustee responsible for managing and distributing assets according to the trust document’s terms. The trustee is also tasked with paying the grantor’s or spouse’s outstanding debts. A Living Trust Attorney from a legal service like CunninghamLegal can work with you to develop a comprehensive plan for protecting your assets. It is important to transfer your assets’ ownership into the trust, maintain clear records and account statements, and communicate regularly with your trustee. You should also review the documents regularly as circumstances change.

It is possible to establish a trust that will not be subject to the claims of creditors, and this type of trust is called an “irrevocable living trust.” this is more expensive to set up than a regular trust, but it is one of the best ways to shield assets from creditors. It is essential to work with a knowledgeable legal professional to draft the document and ensure that all property titles and financial accounts are properly transferred into it. Reviewing the trust periodically is also good, particularly after significant life events such as marriages or divorces.

Creditor Protection

A revocable living trust is a legal document that allows you to transfer assets such as bank accounts, financial investments, real estate, stocks and bonds, or CDs from your name into the name of the trust. A trustee will then manage the trust assets on behalf of your beneficiaries. This way, you avoid the cost, hassle, and delays associated with probate when you pass away.

A trust can also help protect your assets from creditor claims. This is because if you are involved in a lawsuit or other legal proceeding, the assets in the trust remain outside your estate and protected from seizure. A skilled attorney can advise you on various strategies to protect your property from debtors.

However, some limitations to living trusts can be problematic for some individuals. One issue is that the trust’s assets are considered part of the grantor’s taxable estate for tax purposes unless a “pour-over” will is in place. It can impact the amount of federal estate taxes paid.

Another issue is that a living trust only sometimes avoids the need for probate, which can be costly and time-consuming. A skilled trust lawyer can review your options and advise you of the best action for your situation. It is also important to regularly update your trust as circumstances change.

Incapacity Protection

As we age, the chances that we will be temporarily or permanently incapacitated rise. Often, this occurs due to an illness or accident. In these cases, if proper planning is not in place, it can leave family members with a huge burden and many unanswered questions. A comprehensive estate plan includes incapacity planning to address what will happen should you become incapable of making your own decisions.

A revocable living trust is a key part of any incapacity protection plan. It avoids probate at death and prevents the court from controlling your assets at incapacity, but it also lets you name people to manage your property for you. This way, your family members can administer and manage the trust assets without undertaking legal proceedings, which can be costly and time-consuming.

You will also need a power of attorney, a legal document allowing you to grant one or more persons the authority to act on your behalf in any financial matter. It can be effective immediately, even while you still have capacity, or it may only come into effect if you become incapable of making your own decisions. A power of attorney should include disability provisions, and it is also important to name disability trustees and a panel of medical professionals who will be responsible for your care if you lose capacity.

Beneficiary Protection

A beneficiary-controlled trust may help protect assets from the beneficiary’s creditors. This type of trust often includes a spendthrift provision, which prevents the beneficiary from pledging their interest in the trust to secure a loan or otherwise allow creditors to access trust assets (although they can still benefit from distributions). Beneficiary-controlled trusts are commonly used when clients want to ensure that a portion of their estate passes to children from previous marriages. They can also be helpful when a client wants to provide professional management of assets, such as through a trust company.

Many people use a simple technique for passing on their inheritance to children by designating them as the beneficiaries of their financial accounts, including 401(k) and IRAs. However, this technique is often risky because it leaves the inheritance exposed to predators and the child’s creditors. It also means that the child must take proactive steps to keep their legacy separate from other assets and protect it against claims by their spouse in a divorce.