Trusts can benefit you in many ways by shielding your belongings from potential threats. Does a trust protect your assets from a lawsuit?
A trust is a legal arrangement that allows a person to make legal decisions to safeguard their property, assets, and wealth. An attorney can help you make the best choice when deciding which trusts fit your unique needs.
In this blog post, we’ll discuss different types of trusts and the protection they provide.
When Should You Form an Asset Protection Plan?
It’s best to have a protection plan in place before you need one. To put it simply: Now is the best time to start protecting your assets.
Proactive planning ensures that your beneficiaries receive the money, property, and assets that you’ve worked hard for over your lifetime. They will also be protected in the event that someone tries to take your personal assets.
The first step to making an asset protection plan is to speak with an attorney.
Does a Trust Protect Your Assets From a Lawsuit?
A person can choose the right trust by considering their life circumstances and what they’re hoping to accomplish with a protection plan.
The two types of asset protection trusts are a revocable trust and an irrevocable trust.
Revocable Trust
A revocable trust is commonly referred to as a “living trust.” Revocable means the settlor can adjust or revoke the trust at any time.
Does a revocable trust protect your assets from a lawsuit? It’s not likely. This legal arrangement allows the person to have full control of assets over their lifetime.
Because the person legally owns their assets, someone who wins a verdict against them may be able to gain access to them. That means the assets can be taken in the event of a lawsuit.
Irrevocable Trust
An irrevocable trust can protect assets from a lawsuit. Unlike a revocable trust, an irrevocable trust allows the person creating it to transfer ownership of assets and relinquish control.
Because assets are no longer in the person’s control, it’s difficult for anyone to file a lawsuit against a person and gain access to assets.
Advantages of an Asset Protection Trust
While an irrevocable trust is the best option to protect assets from a lawsuit, both types of trusts offer advantages. The benefits of asset protection trusts include:
- Asset management
- Privacy from public records
- Flexibility in how assets are managed and distributed
- Legacy planning
When considering an asset protection trust, it’s vital to make the best decision for your unique circumstances and goals.
An asset protection plan can help guard your assets from a lawsuit. If you’re still wondering about the benefits, speaking with an attorney can help you understand your options.
Asset Protection Trusts With Auld Brothers Law
Does a trust protect your assets from a lawsuit? An irrevocable trust can safeguard your assets in the event of a lawsuit.
It’s important to have a plan in place to protect your assets. The attorneys at Auld Brothers Law can help you create a legal and strategic plan to guard your assets.
We use the following strategies as necessary:
- Ensure proper liability insurance
- Form a comprehensive estate plan
- Maximize your contributions to IRAs
- Move funds to an irrevocable or revocable trust
- Retitle your assets
- Create a special needs trust or protective trust
- Utilize family partnerships
Auld Brothers Law Group is here to help you develop your asset protection plan. Contact us today to learn more about the advantages of trusts and how they can benefit you.