Planning an estate can be an overwhelming process, as there are many documents that you must consider. However, some may not be necessary, given your circumstances. One thing you must consider is whether or not you have assets to protect from creditors. If so, it may be in your best interest to establish an Irrevocable Trust with the assistance of an experienced Medina County, Ohio Trust preparation lawyer. Keep reading to learn more about the protections offered by this Trust and how to create one.
What Is an Irrevocable Trust?
When setting up a Trust Fund, you must decide if it will be Revocable or Irrevocable. The main difference lies in whether or not the Trust can be modified or altered after its creation. When you create a Revocable Trust, the creator has full control over the property and assets in the Fund. As such, they can change who the Trustee is, remove property, and change the terms if they wish to.
However, an Irrevocable Trust is permanent upon its creation. In fact, the creator loses all legal ownership of the assets inside the Fund.
How Does It Shield My Assets?
Because an Irrevocable Trust cannot be altered after its creation and because the creator relinquishes legal ownership over the assets in the Fund after they are transferred, there is no way for a creditor to seize the assets. Essentially, the creator has no control or legal right to the property, so they cannot yield funds or assets from an Irrevocable Trust to a creditor.
It is essential to note, however, that if you are being sued and create an Irrevocable Trust to shield your assets from creditors because of your lawsuit, you may not have protection. In fact, a judge may rule that this was established solely for the purpose of shielding these assets, and you may even be charged with fraud as a result.
However, if you already have a Trust established before the lawsuit, the assets inside will be protected.
How Do I Set One Up?
If you want to set up an Irrevocable Trust, it’s essential to consult with an attorney first and foremost. Unfortunately, setting up a Trust Fund of any kind can be complex, but Irrevocable Funds are permanent. As such, it’s in your best interest to ensure your wishes are met and the terms of your Trust are legally valid and binding.
Once you’ve discussed this with an attorney, you must appoint a Trustee. This is an individual who will manage and distribute your assets according to the terms you’ve decided.
At Krause Law, we understand how complex this process can be. As such, we’re dedicated to helping you navigate this process to obtain the peace of mind you need. Contact our firm today to learn how we can guide you through estate planning during a free consultation.
