Will I Lose Control Over All Of My Assets If I Put Them In A Trust?
If you place your assets in a revocable trust, you have the right to add or remove any and all of those assets at any point while you are alive. You may change the terms of the trust as you see fit. In the event that there are two trustees, the consent of both trustees must be given to make any changes.
On the other hand, if they trust is irrevocable, no property can be removed from that trust other than through the distribution scheme set up by a non-economic distribution provision.
If the trust is irrevocable, assets may only be removed under circumstances which are specifically allowed by the trust. Most people choose revocable living trusts in order to be able to freely move property in and out of their trust.
Can I Ever Change The Terms of My Trust?
As long as all trustees agree to the changes, the terms of a revocable trust may be changed.
However, an irrevocable trust, as suggested in its name, cannot be changed after it has been formed. Special circumstances may allow for minor changes, depending on specific provisions in the trust.
Is Everything That I Put Into A Trust Going To Be Protected From Creditors?
As most attorneys will answer: it depends. However, it is a misconception that a revocable trust will protect your assets from creditors. A revocable trust in no way separates your assets from your creditors. As far as the federal and the state government is concerned, when it comes to court litigation and the right to seize assets, your revocable trust is going to be considered. However, if you have an individual creditor, and the trust is jointly owned, it makes it more complicated for creditors to access a trust when only one trustee is in debt. This does not mean that the assets in the trust are not accessible by the creditors, it just makes it more difficult for them to do so.
Are there certain types of trusts that provide asset protection? Yes. Spendthrift trusts and other types of trusts can provide asset protection but will involve the alienation of your assets. If you have beneficiaries who have potential creditor problems or other issues, you can use a trust to protect assets from those potential creditors by using a spendthrift trust or a spendthrift provision within the trusts. This prevents the beneficiary from being able to pledge any of the assets of the trust as collateral and prevents any of the trust beneficiaries from being able to invade the trust to take that property.
For more information on Losing Control Over Assets In A Trust, a free consultation is your next best step. Get the information and legal answers you are seeking by calling (954) 546-7755 today.
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