How Can I Protect My Assets from Lawsuits?

You may feel secure in your marriage and not fear about your hard-earned assets being lost in a divorce. What’s more, you may not be actively pursuing any business ventures that have your assets tied up. So, you may feel certain that your assets are protected and are almost guaranteed to transfer to your designated beneficiaries in full at the time of your unfortunate death. However, you must not let your guard completely down. This is because you can never predict the very real possibility of having a lawsuit filed against you. This is especially true in the United States, where countless civil lawsuits are filed each and every day. Find out how to protect your assets from lawsuits and how one of the proficient Butler County asset protection attorneys at Heritage Elder Law & Estate Planning, LLC can help you make a comprehensive strategy for this within your estate plan.

How can I protect my assets from lawsuits through my estate plan?

Generally speaking, the purpose of strategizing for asset protection through your estate plan is to create as many barriers as possible for third parties (i.e., plaintiffs of civil lawsuits) before they can legally claim rights to your property. For this, one of the most common methods that many adopt is creating a trust. Specifically, an irrevocable trust.

Now, an irrevocable trust has you transfer a portion of your assets, at whatever amount you are comfortable with, into it. In turn, this trust will be managed by your appointed trustee for the rest of your lifetime. Then, your trustee will administer this trust’s assets to your designated beneficiaries as instructed once you sadly pass away. In the meantime, these assets will be out of reach should a civil lawsuit ever be filed against you. The same goes for creditors who potentially come after you or judgments possibly made against your estate.

This is supposed to work because, with an irrevocable trust, you essentially surrender your ownership rights over the assets you use to fund it. Therefore, you may not be authorized to recover them at any point, especially to pay for a plaintiff’s award. This is to say that a revocable trust may not offer the same sort of asset protection.

What are the other benefits of establishing a trust in my estate plan?

Besides protecting your assets from a potential civil lawsuit filed against you, there are other benefits to establishing a trust as part of your estate plan. They read as follows:

• A trust allows you to bypass the probate process.
• A trust allows you to qualify for additional tax benefits.
• A trust allows you to optimize for privacy and flexibility within your estate plan.
• A trust allows you to protect assets for a disabled beneficiary or for a charitable legacy.

There is a lot to consider before establishing your estate plan. To help you make the right considerations, please consult with one of the talented Butler County elder law attorneys. Our team at Heritage Elder Law & Estate Planning, LLC will guide you toward the best decision.