One of the most important aspects of an estate plan is creating a trust. To learn if creating a trust can protect certain assets from bankruptcy, continue reading. If you require assistance creating a comprehensive estate plan, it is important that you gain the assistance of a skilled and experienced estate planning attorney who can walk you through the steps of this process. To learn more about our services and how we can assist you, give our firm a call today.
Can creating a trust protect certain assets from bankruptcy?
Trusts are used to protect assets from certain legal troubles. They can also preserve these assets for your beneficiaries. However, if you or one of your beneficiaries has incurred debt and is filing for bankruptcy, assets in certain trusts may not be exempt from various collect activities.
There are two primary types of trusts: revocable trusts and irrevocable trusts. A revocable trust allows individuals to maintain control of the assets they place in a trust until their passing. Those assets will then be transferred to the beneficiary named in the trust once the individual passes.
An irrevocable trust allows the beneficiaries named in the trust to own the assets from the moment the trust is made from that point forward. However, you can also add a spendthrift provision to your irrevocable trust which can protect it from credit seizure. This is put into place in case you or the beneficiary you name ever have to file for bankruptcy.
What are the benefits of creating a trust?
Incorporating an irrevocable trust in your estate plan has many benefits including the following:
- They can protect and preserve your assets
- Estate tax reduction
- Charitable estate planning
The benefits of creating a revocable trust include the following:
- They can help your family avoid the probate process upon your passing
- They can help you financially plan for mental incapacitation
- They can protect your privacy until you pass away
If you have any further questions regarding creating a trust or creating a comprehensive estate plan, do not hesitate to reach out to our experienced estate planning attorney. We would be happy to walk you through the estate planning process to ensure your wishes are met. We understand how important this process is for you, your future, and your loved ones.
Contact our experienced Montgomery County, Maryland firm
The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.