Posted on: 12 January 2017Share
For many people, a living trust is a way for their estate to avoid going through probate. However, there are many other benefits to using a living trust. One of the most important reasons is an opportunity to protect your estate and its heirs. If you are considering a living trust for protection purposes, you need to understand the limitations that can impact what you can and cannot do with one.
Can a Trust Prevent Creditors From Pursuing Your Assets?
Some people who are facing financial difficulties attempt to protect their assets from creditors by establishing a living trust. What they might not realize is the type of trust that is established plays a major role in whether or not assets are protected from creditors.
If you create a revocable living trust, creditors can still pursue legal actions against you. If the creditors are successful, your assets could be taken to pay off debts. A revocable trust is considered to still be your asset because you have the power to end the trust whenever you want.
However, if you establish an irrevocable living trust, creditors cannot take action to get your assets. Since you have no control over assets once they are in the irrevocable trust, it is no longer considered to be your asset. If you are considering an irrevocable trust, talk to a trust lawyer about the pros and cons of doing so.
Can You Keep the Public From Knowing What Is in Your Trust?
If you are concerned with the details of your estate being public, a living trust might be the path to keeping the details private. Many of the details of your trust will be private, even after your death. There are some exceptions though. One of those exceptions concerns real estate. Real estate records are kept by the county in which the property is. Regardless of your expectations from the trust, those records cannot be kept private.
The details of your trust could also become public if there is a lawsuit filed against it by a family member. Since the lawsuit will be public record, the trust will, too. If you believe that a family member will challenge the trust, your attorney can help you identify ways to prevent a lawsuit.
To gain a full understanding of the protections that are offered by a living trust, work with a trust lawyer, such as those found at Wright Law Offices, PLLC. In addition to explaining the trust's limitation, the lawyer can help you find other ways of protecting your assets.