You’ve probably heard of most of the major kinds of trusts, like revocable or irrevocable trusts. One that is a little less common is the asset protection trust. This trust is particularly helpful because it’s designed to guard your assets against claims from creditors who would like to collect on debts you or your estate owe.
You can have an asset protection trust at any point in your life, not just in preparation for death. An asset protection trust can be set up in the U.S. and insulates you against financial losses if you have to go bankrupt or face collections activities.
Can you have a revocable asset protection trust?
Most asset protection trusts are going to be irrevocable for at least a term of several years. In some cases, they will be irrevocable until the trustmaker’s death. In other cases, they may be irrevocable for five, 10 or 15 years, for example. The trustmaker also won’t be assigned as the beneficiary during the term of the trust, but they may have their assets returned to them once the trust is terminated.
As a way of planning against debt collections and bankruptcy, asset protection trusts are extremely beneficial. They’re just one type of trust to consider adding to your estate plan, and they’re a unique type that has benefits during your lifetime.
Our website has more information on trusts and what you should do if you want to protect your assets against potential collections activities. Your attorney can talk to you about different trust options to protect your estate and how they may benefit you during your lifetime.