When you begin the estate planning process, you’ll likely have many considerations to make. Unfortunately, this can be overwhelming if you do not have proper guidance to help you through this process. As such, it’s essential to enlist the assistance of a Washtenaw County trusts attorney. One thing you must consider is whether an irrevocable trust is the right choice for your needs, as they can help protect against creditors but have potential downsides. Keep reading to learn more about this complex process.
What Is an Irrevocable Trust, and How Can It Shield My Assets?
When you create a trust fund, you must determine whether it’s in your best interest to establish a revocable or irrevocable fund. The main difference between these two is that a revocable trust can be changed after its creation, whereas an irrevocable trust cannot be modified.
With an irrevocable trust, you no longer legally own those assets. By placing the assets, property, or money in the fund, you relinquish the legal right to ownership. Instead, they will be managed by the appointed trustee until they are distributed according to the terms and conditions of the trust you determined. The only way to modify a trust is by placing more funds and assets in the fund.
Because you no longer own the assets, a creditor cannot legally seize them. As such, those who are the defendant of lawsuits or court orders can heavily benefit from an irrevocable trust, as it can help shield their assets from creditors. Instead, these documents can ensure the intended beneficiaries receive the assets left to them.
It is important to note that a court can reverse the inclusion of an asset if they believe an asset was placed in the trust to defraud a creditor. As such, it’s essential to take the necessary steps to consult an experienced attorney before creating these documents.
How Do I Create an Irrevocable Trust?
If you want to create an irrevocable trust to ensure your beneficiaries receive their intended inheritance and protect your assets from creditors, it’s in your best interest to enlist the assistance of an experienced attorney. Unfortunately, trying to navigate this process on your own can have serious ramifications. You may include terms that contradict your wishes or accidentally commit fraud against a creditor.
When you’ve consulted an attorney, they will help you navigate the process of establishing a trust. Generally, this includes writing the terms of the fund, appointing a trustee to manage and distribute the assets according to the terms of your trust, and ensuring assets are transferred legally.
As you can see, there are many crucial considerations you must make when establishing an irrevocable trust. Luckily, the dedicated team at Collis, Griffor & Hendra can help you navigate this process to determine the best course of action for your needs. Contact us today to learn more about how we can help you navigate the complexities of this process.
