Can Creditors Reach Assets in a Trust?
In many cases, creditors have a hard time reaching into someone’s trust to seize assets. This is because when you set up a trust with certain rules, you essentially no longer own the assets inside. You can still get money and assets out of the trust, but any withdrawals have to be in line with the rules you set up with the trust. A trustee, the person managing these assets for you, can also decide to give you something from the trust.
Many kinds of trusts can be set up, and which would work best for you depends on how much you have in assets and exactly what you are trying to protect your estate from. For example, an offshore trust is great at protecting assets because its country does not have to honor orders issued by American courts. You can also explore LLCs, family limited partnerships, and other ways to keep assets safe before you pass away and pass them down to your beneficiaries.
Do Retirement Accounts Protect Me From Creditors?
Some of your retirement accounts might already be protected from creditors. The Employee Retirement Income Security Act of 1974 is a federal law that gives some types of accounts unlimited asset protection and gives other accounts, like IRAs, up to $1 million in protection from bankruptcy. If you show us what kind of accounts you have already stored assets in, we can tell you which ones are protected by ERISA and if you should be exploring other options, like trusts.
Should I Talk to an Estate Planning Attorney?
Anyone serious about protecting their assets from creditors and others should talk to our estate planning attorneys. Some of our suggestions, like offshore trusts, can come with plenty of complications and rules about compliance. Having experienced attorneys who know the ins and outs of these arrangements can be beneficial.
Meet With Our Legal Team
If you are looking for effective ways to protect your estate and give your family peace of mind, we may be able to help. Contact Herting Law, PLLC and schedule a consultation. We can tell you more about our options and what an estate planning attorney can do to assist you.
