Can a Living Trust Help Me Protect My Assets?

Protecting your hard-earned assets is a crucial aspect of estate planning. One effective tool that can help you achieve this goal is a living trust. This type of trust allows you to maintain control over your assets while providing some protections. However, while a living trust can provide a variety of benefits, it may not be the best method for protecting assets in certain situations. By understanding how living trusts may be used and what other options may be available, you can determine the best options for preserving your wealth and passing money and property on to future generations.

Understanding the Basics of Living Trusts

A revocable living trust is a legal instrument that allows you to transfer your assets out of your possession and into the control of another party. The assets will be owned by the trust itself, and a trustee will manage the assets and distribute them to your beneficiaries based on your instructions. With a living trust, you can act as the trustee and maintain control over your assets, while also designating a successor trustee to manage the trust in the event of your incapacity or death. By placing your assets in a living trust, they are no longer considered part of your personal estate, which can provide some protection from potential threats. 

Some benefits of living trusts include:

• Avoiding probate – After their death, an inventory is taken of a person’s assets, and their property is distributed to different beneficiaries based on the instructions provided in their will. This is known as the probate process, and it can be time-consuming and costly. The executor of an estate will often be subject to court supervision and required to pay a variety of fees and legal costs. However, trusts are not subject to probate. A living trust will allow for a smoother and more efficient transfer of assets to your beneficiaries. This can save your loved ones time and money while helping them avoid stress. 
• Maintaining privacy – Unlike a will, which becomes a public record when it is filed in probate court, a living trust allows for a greater level of privacy. Since the trust does not go through the probate process, the details of your assets and how they will be distributed to your beneficiaries will remain private. This can be particularly important if you have sensitive or valuable assets that you prefer to keep confidential or if you wish to keep your family’s affairs out of the public eye. By maintaining privacy, a living trust can help protect your assets from potential threats and maintain the confidentiality of your estate plan.
• Flexibility and control – A living trust will allow you to maintain control over your assets. You can make changes to the trust, add or remove assets, and even revoke the trust if necessary. When you serve as the trustee, you will be able to manage assets and ensure that they are used appropriately. During your lifetime, you can also be a beneficiary of the trust, which will allow you to use your assets to provide for a variety of needs, such as long-term care. This flexibility allows you to adapt your estate plan to changing circumstances, ensuring that your property will be protected and distributed according to your wishes. Additionally, a living trust can include provisions for managing your assets in the event of your incapacity and ensuring that they will be used to address your medical and personal needs. This can provide you with peace of mind knowing that your affairs will be handled as you desire. 

Using Trusts for Asset Protection

Since you will be able to maintain control over the assets in a living trust, and you can revoke the trust at any time, this may not be the best solution for protecting your assets from creditors or lawsuits. If creditors or other parties seek legal judgments against you, they could potentially access the assets in a living trust. 

Fortunately, other types of trusts known as asset protection trusts can help you shield assets from these types of losses. These irrevocable trusts will ensure that assets are no longer in your possession or control and are therefore protected from potential claims. This may be a beneficial option for those who are at a higher risk of lawsuits due to their business or profession. By placing your assets in an asset protection trust, you can ensure that they will be safeguarded for the benefit of your beneficiaries. 

Contact Our Naperville Living Trust Attorney

A living trust is a powerful tool that can help you manage your assets, provide for your family’s needs, and transfer money or property to your beneficiaries. These trusts can also provide limited protections in certain situations. However, you may need to consider other types of asset protection trusts to make sure you will be able to preserve your wealth and pass it on to your heirs. At the Gierach Law Firm, our DuPage County asset protection lawyer can help you determine whether a living trust or another type of trust is the right option for your specific circumstances. To learn how we can assist with your estate planning needs, contact us today at 630-756-1160.

Sources:

https://www.experian.com/blogs/ask-experian/how-are-debts-handled-when-you-have-a-living-trust/

https://www.investopedia.com/terms/a/asset-protection-trust.asp