In the U.S. catastrophic medical bills can completely deplete a person’s assets. Even with the best financial planning, you cannot always prepare for medical bills in the future. After all, you cannot know if illness or injury will strike and leave you with debt that you can’t escape. Many people worry about their assets and wonder how they can protect those assets. How can you keep your family’s assets safe for the future? One answer may be in an irrevocable living trust.
Irrevocable Trusts Protect Assets
If you want to protect your assets, then you may want to think about irrevocable trusts. These are trusts that you have no control over. You cannot revoke them either. Once you put the assets into the trust, they are no longer yours. This means that the creditors cannot touch them to pay for your medical bills. Complex trusts can help to alleviate the worry that creditors can touch your assets. It is important, when establishing any trust, that you speak with a lawyer. Trusts can be extremely complex and if you make a mistake, it could invalidate it.
Revocable Living Trusts Cannot Protect Assets
Revocable living trusts are still valid estate planning vehicles. Often, estate planning lawyers will probably suggest these types of trusts when you are drafting your estate plans. These trusts are a great way to help save your family from dealing with probate court and other expenses that come with a will. Property in a living trust transfers directly to the beneficiaries when you die.
This does not mean that creditors cannot access the trust while you are still alive. The trust is still yours. You are still the owner and hence the assets are yours until you pass away. In these trusts, you are named as the trustee and you can make all choices for the trust. This means you can add property, take out property or give it away whenever you want to. If the assets belong to you, creditors can touch them.
To deal with catastrophic medical bills is difficult for every family. It can completely dry your finances or deplete your assets. If you are worried about asset protection, then your best option is to speak with a living trust lawyer. While a revocable living trust can help you to protect your assets, you need to make sure that you choose a valid route to protect your estate. For more information, consult with a living trust lawyer in Sacramento, CA.
Thanks to the Yee Law Group for their insight into estate planning and catastrophic medical bills.