DOES A REVOCABLE LIVING TRUST PROTECT ASSETS IN OHIO?

Why Drawing Up a Last Will Is Not Enough In Protecting Your Assets After Your Death

Barry H. Zimmer Estate Planning Attorney The Zimmer Law Firm 523-721-1513

There are no one-size-fits-all estate planning documents, and unfortunately some people are under the mistaken impression that a last will fits this description.
Everyone knows that a last will can be used to arrange for the distribution of your remaining assets to your loved ones after you die. However, far too many people assume that this is the right document for them when in fact they may be better served by a different vehicle or vehicles of asset transfer. One thing to take into consideration is the matter of asset protection. Creditors who win civil judgments could seek to attach assets that you have that remain in your personal possession. It is possible to take steps to protect your assets from these judgments.

When we use the term "creditors" we are not just talking about entities like mortgage companies, automotive lenders or credit card companies. Creditors in this context could include litigants seeking redress, estranged spouses, and even the tax man. If you simply draw up a last will while retaining direct personal possession of the property that you own there is nothing stopping creditors of any ilk from attaching assets that are included in your estate.

If you simply want to arrange for efficient transfers of assets to your loved ones and you are not concerned about the estate tax or asset protection you may well benefit from the creation of a revocable living trust.

PROBATE
The process of probate is a factor when you use a last will to transfer your assets. One of the reasons why people often choose to avoid probate is because of the fact that it is time-consuming. When creditors are seeking redress from the estate this is definitely going to slow down the process, especially if the executor of the estate wants to question the validity of the claim.

Estate Planning Attorney Cincinnati OH Does a Revocable Living Trust Protect Assets in Ohio?

Even if no unusual circumstance were to arise probate can routinely take a number of months to run its course. The heirs to the estate do not receive their inheritances while the estate is been probated. This can be a temporary disappointment for some people who are on firm financial footing. However, in other cases people are very much depending on their inheritances. Under those circumstances probate can actually impose genuine financial hardships. This is unfortunate, because there are relatively simple steps that you can take to arrange for assets transfers to your loved ones outside of probate.

REVOCABLE LIVING TRUSTS IN OHIO

Revocable living trusts are commonly used to facilitate probate avoidance. The person who creates the trust is known as the grantor or settlor. The way that it works is you as the grantor select a trustee. This is the individual who manages the assets that have been placed into the trust. You also name a beneficiary. This individual receives monetary distributions from the trust. The nature of these distributions is decided by you when you create the trust agreement. It should be noted that there can be multiple beneficiaries.

Estate Planning Attorney Cincinnati OH Does a Revocable Living Trust Protect Assets in Ohio?

When you create the trust you need not surrender control of the decisionmaking to someone else while you are still alive. In most cases the grantor of the trust will choose to act as both the beneficiary and the trustee. You can select successors who would fill these roles after you pass away. Your successor trustee could also administer the resources that have been conveyed into the trust in the event of your incapacitation. Now, let's get back to the subject of asset protection. You may think that assets that you conveyed into a revocable living trust are protected from creditors because after all, they are in the trust, not in When you convey assets your direct personal possession.

Another thing to consider is the actual name of the device: revocable living trust. You as the grantor can choose to revoke the trust and assume personal ownership of the property. At that point you can do anything you want to do with the assets. One of the things that you could do would be to pay creditors who are on the right side of civil money judgments. Because of this reality revocable living trusts provide no asset protection to the grantor.

into a revocable living trust they wont be probate property after you pass away. The trustee that you choose will be able to distribute assets to your beneficiaries outside of the process of probate. Your affairs will be private, unlike probate cases that are open to the public.

However, this is an incorrect assumption, and there are those who have fallen into this trap. As mentioned above you are probably going to be acting as the trustee and the beneficiary. You can do anything you want to do with the property that has been conveyed into the trust. There are no restraints.

WHAT CAN YOU DO?

If you are interested in asset protection planning various different options exist for you. One possibility would be to create a family limited partnership. The partners are not personally liable for the actions of the partnership. There are

Estate Planning Attorney Cincinnati OH Does a Revocable Living Trust Protect Assets in Ohio?

also estate tax benefits that can be realized by the creation of a family limited partnership. Another possibility would be the creation of a limited liability company. Similarly, creditors would have to seek redress from the company rather than those who are running the company.

CONCLUSION
Asset protection strategizing can be complex. The best way to go about it is with the assistance of a licensed estate planning attorney.

REFERENCES

Nolo http://www.nolo.com/legal-encyclopedia/revocable-living-trusts.html Investopedia http://www.investopedia.com/articles/pf/06/revocablelivingtrust.asp

About the Author

Barry Zimmer engages in a Wealth Care Practice. Specific services include include basic and advanced trust planning; trust estate settlement; probate estates; trust beneficiary advocacy and representation; asset protection; business organization; business succession planning; and pre-marital planning. His goal is to make creating a Wealth Care and Estate Plan the first step in a relationship that is satisfying and unlike a client's experience with any other lawyer.

The Zimmer Law Firm 9825 Kenwood Road, Suite 201 Cincinnati, OH 45242 Phone: (513) 721-1513 info@zimmerlawfirm.com