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Law Firm of Badeaux & Associates

550 Egret Bay Boulevard, Suite 121
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HomeClear Lake Estate Planning Law…

Clear Lake Estate Planning Lawyer Discusses Trusts for Asset Protection

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Clear Lake Estate Planning Lawyer Discusses Trusts for Asset Protection

Posted By
Joanne M. Badeaux
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Our Clear Lake estate planning lawyer from Badeaux & Associates understands that people with significant assets are all generally concerned about the best method to protect their valuable property from a potential lawsuit that could result in attachment to those assets. There are some ways that real estate and financial instruments can be protected. Many of those individuals attempt to establish a trust for protection, but there are differences in trust types. And, those differences directly affect any claim that a creditor may make against the owner of those assets. It is always a good idea to consult with a Clear Lake estate planning lawyer before making any decision on how to best protect assets and wealth.

Revocable Living Trust

A revocable living trust cannot protect assets from creditors in the event of a lawsuit or or a bankruptcy. According to the law, a revocable living trust asset is still the designated property of the trust owner, who is also usually deemed as the trustee. This trustee designation provides the legal authority to maintain oversight of transferring those assets, which leaves the assets as property of the trustee. Assignment of a second trustee in a revocable living trust will not protect assets either. However, property can be transferred in and out of a living trust before the owner is deceased, and those assets can be transferred to the proper individual before inheritance becomes an issue in probate. The actual purpose of a revocable living trust is maintaining liquidity of the assets while avoiding probate altogether after the trust owner is deceased.

Irrevocable Trusts

Irrevocable trusts are designed to let an individual put certain assets in an established trust without the authority to control those assets. In this manner, the purpose of an irrevocable trust is to separate the property from the trust owner. In addition, any income generated by the trust assets are also property of the trust. They do not apply to the primary trust maker’s income statement and are not taxable as income. Because of the ownership designation and the irrevocable status of the trust, the assets included in the trust are not accessible for creditors to attach or susceptible to confiscation as a result of a lawsuit. Once this trust is established it cannot be revoked, so the decision to use this protection method is final.

Alternative Methods of Protecting Assets and Wealth

There are a few alternate ways wealthy individuals can protect their assets. One method for very wealthy people is establishing a complex trust and transfer the money out of the United States, along with assigning a foreign trustee. State law can also be utilized in some cases when wealth can be transferred to financial institutions in states that have legislation protecting debtors from creditors. This can be very effective in a bankruptcy case when retaining homes during bankruptcy is a primary concern. Limited liability companies, or family limited partnerships, are also an effective method of protecting assets through corporate structure of the family, often used when the family actually operates a successful business or an investment group. And of course, insurance is an excellent method of protecting and growing wealth by paying a policy in full that could also reap excellent earnings beyond the premium investment.

Contact a Clear Lake Estate Planning Lawyer

It is always a good idea for families who have considerable wealth to seek advice from an experienced and effective Clear Lake estate planning lawyer from the Law Firm of Badeaux & Associates and let him/her evaluate your need for estate planning to protect personal assets and avoid probate court after the death of the primary asset owner. Call (281) 486-4737 today.

Categories: Estate Planning

Practice Areas

Wills and Estates

  • Wills and Trusts
  • Powers of Attorney and Directives to Physician
  • Why Choose Us for Wills & Trusts
  • Estate Taxes
  • FAQ Wills and Estates

Probate

  • Probate Estate Administration
  • Why Choose Us for Probate
  • Executor and Trustee duties
  • Guardianship of Incapacitated Person
  • FAQ Probate

Real Estate Law

  • Real Estate
  • Why Choose Us for Real Estate
  • FAQ Real Estate
  • Commercial Real Estate
  • FAQ Commercial Real Estate

Business Law

  • Business Law
  • FAQ Business Law
  • Buy-Sell Agreements
  • Franchises

Read Client Reviews

Meet Our Attorneys

joanne
Joanne M. Badeaux
Senior Attorney
In her 30 years of practicing law, Joanne M. Badeaux has had the pleasure of representing multiple generations of families in their estate planning, probate and real estate matters. Joanne has seen a… Read More About Joanne
Annabel Moore's Profile Image
Annabel Moore
Attorney
Attorney, Annabel Moore, focuses her practice on estate planning, wills, trusts and probate. Annabel Moore serves as of counsel with the law firm of Badeaux & Associates on particular cases. She e… Read More About Annabel

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Law Firm of Badeaux & Associates
550 Egret Bay Boulevard, Suite 121
League City, TX 77573
Phone: (832) 569-2218
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