The fact of the matter is that you cannot predict the future. However, you may take the appropriate steps to prepare for any situation that may arise in the future. For one, you may utilize certain tools within your estate plan to protect you and your beneficiaries in the event of a lawsuit. Continue reading to learn how an irrevocable trust might offer lawsuit protection and how an experienced Broward County trust lawyer at The Probate Lawyers can offer you further protection.
Is it possible for an irrevocable trust to offer lawsuit protection?
Put simply, one of the main functions of an irrevocable trust is that it removes all incidents of ownership. In other words, your transferring of assets into the trust signifies that you are legally resigning all ownership rights over the trust and its assets. And since you longer own these assets, a plaintiff of a civil lawsuit cannot collect them as part of their monetary award. For these reasons alone, it may be in your best interest to set up an irrevocable trust if you work in a profession that is particularly vulnerable to lawsuits. Examples include if you are a physician (i.e., medical malpractice) or attorney (i.e., legal malpractice).
It is worth mentioning that a revocable trust does not have the same effect. This is because, dissimilarly, you hold control of the assets within this type of trust throughout the rest of your lifetime. With these assets in your possession, they may be easily taken away by a plaintiff in a civil lawsuit, a creditor in a bankruptcy proceeding, or otherwise.
What are the other benefits of an irrevocable trust?
Of note, there are several different types of irrevocable trusts. To name a few, there is an asset protection trust, a charitable trust, a special needs trust, a bypass trust, and a life insurance trust, among others. The type of trust you select may be dependent on your specific financial situation and your beneficiaries’ specific needs. Overall, these different types of irrevocable trusts come with many other benefits for you and your beneficiaries besides offering lawsuit protection. Examples of such benefits are as follows:
- You may be relieved from the tax liability on the income generated by these assets.
- You may be relieved from the worry that your beneficiaries may misuse your assets.
- You may be relieved from having these assets disqualify your loved ones from government benefits.
- You may be relieved from having these assets taken by your former spouse in divorce proceedings.
- You may be relieved from having these assets taken by outside creditors in bankruptcy proceedings.
You must not take any chances when it comes to your irrevocable trust and your overall estate plan. So please retain the services of a skilled Broward County estate lawyer from The Probate Lawyers as soon as you can.
