Creating an estate plan is a wise decision, as it can help minimize the risk of conflict between your loved ones, as you can stipulate your precise wishes for your medical care, assets, and final arrangements. However, it’s crucial to ensure that you craft a well-constructed plan that covers all your bases. If you don’t adequately safeguard your assets, you risk losing them in a lawsuit, bankruptcy, or other creditor actions. Therefore, it’s vital to understand the laws and measures you can adopt during estate planning to protect your hard-earned assets. To accomplish this, it’s essential to enlist the legal assistance of a qualified Montgomery County Estate Planning Attorney who can help you determine the best approach to ensure asset protection after you’ve departed. Please continue reading to learn how to protect your assets from lawsuits and creditors during estate planning.
Does an irrevocable trust offer asset protection from a lawsuit?
When you’re estate planning, having asset protection in mind is crucial, as it can ensure that your hard-earned assets are not lost to lawsuits or creditors. Depending on your specific circumstances, creditors may garnish your assets, including if you file for bankruptcy and are subject to a civil lawsuit or a divorce. The key to asset protection is to create various obstacles for individuals before they can legally claim rights to your estate.
The primary way you can protect your assets is by creating an irrevocable trust. Once an irrevocable trust is created, it cannot be changed. Generally, this type of trust can help your heirs avoid probate. For asset protection purposes, an irrevocable trust essentially removes all incidents of ownership. When you transfer your assets into a trust, you legally relinquish all ownership rights over the trust and its assets. In other words, you no longer own these assets. In the event of a civil lawsuit, the plaintiff cannot recover assets within an irrevocable trust as part of their award. In addition, creditors also do not have a claim to these assets as you no longer have ownership of these assets. Thereforcreating an irrevocable trust may be in your best interest e, if you work in a profession or business susceptible to civil lawsuest. It’s imperative to note that revocable trusts will not protect your assets from lawsuits or creditors.
When protecting your hard-earned assets, you should take the necessary steps to ensure your savings are not vulnerable to lawsuits or creditors. Although you cannot predict the future, you can take the appropriate steps to prepare for any situation that could arise in the future. If you’re considering creating an estate plan for asset protection, you should enlist the help of a determined Montogomery County trust attorney from the legal team at JD Katz, who can help you utilize specific tools to protect your beneficiaries in the event of a lawsuit.