When you are planning your estate you may be concerned about asset protection. It is important to keep your assets safe for your own purposes while you are living. At the same time, you should also protect assets that you are passing along to your loved ones.
You could naturally think that assets that are conveyed into any type of trust would be protected from creditors and claimants. This is actually not the case. There are trusts that provide asset protection, and there are others that do not.
Revocable trusts are very commonly utilized in the field of estate planning. With a revocable living trust you can retain control of the assets that you placed into the vehicle while you are living.
After you die, the trustee that you choose distributes resources to the beneficiaries according to your wishes. These distributions take place outside of the costly and time-consuming process of probate.
Because the trust is in fact revocable, you can rescind the trust and reclaim personal possession of property that you have conveyed into it. You may also act as trustee and beneficiary while you are living. This gives you control over the resources.
Because you maintain this control, assets that have been conveyed into a revocable living trust would not be protected from attachment.
Trusts in Davenport Iowa
There is another type of trust called an irrevocable trust. The name says it all: you cannot revoke the trust, and generally speaking you cannot change the terms (though this may be possible under some circumstances using a special power of appointment).
Because you surrender incidents of ownership, assets that you place into this type of trust would be protected from litigants seeking redress.
Beware of Do-It-Yourself Estate Planning
The above information sheds light on the dangers of do-it-yourself estate planning. There are websites on the Internet that sell generic template legal documents.
You could go forward under certain impressions and make assumptions. For example, you may assume that assets that you convey into a revocable living trust are protected.
In fact, back in 2012 the highly respected magazine Consumer Reports put do-it-yourself estate planning under the microscope. They engaged three legal professors to examine last will documents created using tools provided by three of the leading online purveyors of legal documents.
They stated that unintended negative consequences could result if a layperson was to use one of these services to create an estate plan.
After hearing what the professors had to say, Consumer Reports advised against do-it-yourself estate planning.
If you want to utilize a trust to protect assets, you should certainly discuss the matter in detail with a licensed Davenport Iowa estate planning lawyer. You can’t go wrong when you work side-by-side with a local attorney who is licensed to practice in the state of Iowa.