Becky Cholewka: Did you know there are actually about 30 to 40 different types of trusts? They mainly fall into two categories though revocable and irrevocable trusts. That pretty much is exactly what it sounds like.
A revocable trust, you can change, amend, or revoke. An irrevocable trust, you cannot.
One of the questions I get all the time is, “Becky, should I have a revocable trust because if I get in a car accident, I want to make sure all of my assets protected?” Actually, when you have a revocable trust, and you are still alive, you still have full control over your assets. What that means is you have absolutely zero protection as far as creditors go, in that instance.
If you have a revocable trust, you get in a car accident, and you get sued, any assets that are titled in your individual name or that are in the name of your revocable trust could potentially be lost to those creditors.
The only type of trust that will allow you to have creditor protection would be in an irrevocable trust.
Most people, when they do estate planning, they start with a revocable trust. That’s because they don’t want to give all of their money, while they’re alive, away right now and lose control over it.
That’s why most people just do revocable planning, to make sure they’re avoiding probate, have planned for incapacity, if something should happen, and to have their trust turn into an irrevocable trust when they die.
That means, now, any moneys they’re leaving to their spouse, or their children, or grandchildren are in an irrevocable trust. Those beneficiaries and loved ones will have asset protection in the moneys that you leave them. While you’re alive, monies in a revocable trust, no creditor protection.
That doesn’t make sense to you? Feel free to call my office and make an appointment. We love to do trust planning here, and I would love to help walk you through what would be the best type of plan for you.
We hope that you call. Check out our website if you need some more information. We have lots of little videos on there as well as what is estate planning and what do these documents do for you. You can check those out at gilbertlawoffice.com.
If you’d like to call Peg in the office, please feel free to reach us at 480‑497‑3770.
