Cover Your Assets!


Happy St. Patrick's Day from a quarter-irish attorney!

I'm often asked whether a revocable trust will protect a client's assets from creditors. Many people think it does but they are mistaken.

A revocable living trust, which is the type of trust most of us think of and refer to when we ask that question, is not designed to shield property from the tentacles of creditors. The main issue is control. If you still control the property that is transferred to the trust then the law says you can just as easily transfer the property out and pay off your debt.

So how can you shield your property from creditors? Well, make sure it is not "yours" anymore. In the old days this meant transferring the property to an irrevocable trust that you could no longer control or really even enjoy.

In the last few years, Utah and other states have created a type of trust called a "Domestic Asset Protection Trust" (DAPT). There are a lot of requirements for establishing and maintaining a DAPT in order to provide a creditor shield. Nonetheless, if you follow those rules as statutorily outlined, the property you transfer to the DAPT can be protected from creditors and others.

Be cautious. A DAPT is complicated and professional assistance is highly recommended!

Recent Posts
Archive
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square

Disclaimer.

The information herein provided by Plan Right Law, PLLC, is solely for general information purposes and does not constitute legal advice. Nothing herein constitutes an offer to represent any recipient nor creates an attorney-client relationship. The information provided may be changed or updated at any time for any reason without any guarantee that it is current, correct, or complete. Do not act or refrain from acting based on the information. Any fees listed are for informational purposes only. Client testimonials are about individual experiences and do not reflect any guarantee of results. Each person's situation and case is unique.