Articles Tagged with living trusts

pexels-photo-684387-300x198Do you remember that episode of the U.S. version of “The Office” where Michael Scott thinks he can seek bankruptcy protection from his creditors simply by walking into the office and stating, “I declare bankruptcy!” Obviously, that is not how bankruptcy works. Yet, when it comes to estate planning, some people operate under a similar misunderstanding of the law; they think they can shield their assets from their creditors by placing it in a trust.

How the Law Treats Revocable Living Trusts

Now, there are ways to use trusts as a legal means of asset protection, but when it comes to a revocable living trust–the most common form of trust used in estate planning–that is not the case. A revocable living trust is a means of avoiding probate, not a way to avoid paying back your creditors. Continue reading

Living trusts are a flexible estate planning device that you can amend, modify, or revoke at any point during your lifetime. Of course, once you pass away, the terms of the trust become irrevocable. In other words, your successor trustee is Trustbound by its terms and must administer the trust assets as you direct.

This also means that your choice of a successor trustee is critical in ensuring the successful administration of the trust. Many people create a trust because they fear certain family members gaining control of their estate. Having a strong trustee in place, which in some scenarios may even mean appointing a non-relative or corporate trustee, can help ensure that the trust ultimately fulfills your wishes. Continue reading