Creating an estate plan is a way to protect your loved ones and ensure that they’re able to get the assets you want them to have when you pass away. One way that you can do this is to set up trusts that will pass those assets to them according to your terms.
All trusts bypass the probate process, so your heirs will get what they’re due easier and faster than they would with a will. There are also certain protections that some trusts offer that a will doesn’t provide. One of the most important things you need to know about trusts is that revocable trusts and irrevocable trusts has to do with protection from creditors.
Irrevocable trusts provide protections
An irrevocable trust can’t be changed once it’s created unless all beneficiaries agree to the changes. Because the creator of the trust doesn’t have control of the assets, the trust’s contents are protected from creditors. Once you establish an irrevocable trust and fund it, your creditors can’t stake a claim to anything in it.
The contents of a revocable trust aren’t protected from creditor claims because the creator can change or cancel the trust. Since they have control over the contents, creditors can lay a claim to them.
Taking the time to find out specific information about the types of trusts you’re considering is important. Working closely with someone who understands your estate planning goals and the dynamics of your wishes can help you to get things set up in the best manner possible. Getting everything established now is beneficial since you can have it all in order while you’re legally able.