The primary purpose of a living trust is to help your beneficiaries avoid the grueling process of probate. There are additional benefits, however, that are important to consider. One such benefit is the ability to provide asset protection for your beneficiaries.
A properly drafted revocable living trust with asset protection provides a protective wall around the inheritance received by your beneficiaries, which can keep out creditors, ex-spouses, or others who hope to grab part of that inheritance. If your beneficiary is involved in a lawsuit for a car crash, for example, the asset protection language in the trust will protect for them the money or assets received from your estate following your death. Although this protection is not provided to you (since your trust is revocable while you are alive), it can allow you the peace of mind of knowing that your children, or any other of your beneficiaries, will not lose their inheritance to a creditor immediately after receiving it. This can also allow important assets, like a home, to remain in the family despite insolvency among children.
Since many trusts do not automatically provide asset protection, it is very important to ensure that your estate planning attorney includes it.
Contact the attorney’s at Celaya Law today to schedule an appointment for your next steps or to answer any questions you might have.