does a revocable living trust protect assets in ohio?
TRANSCRIPT
7/30/2019 Does a Revocable Living Trust Protect Assets in Ohio?
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Why Drawing Up a Last Will Is Not Enough In Protecting Your Assets After Your Death
DOES A R EVOCABLE
LIVING TRUST PROTECT
A SSETS IN OHIO?
arry H. Zimmer Estate Planning Attorney The Zimmer Law Firm 523-721-1
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tate Planning Attorney Cincinnati OH Does a Revocable Living Trust Protect Assets in Ohio?
“ There are no one-size-fits-all estate planning documents,and unfortunately some people are under the mistakenimpression 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 couldinclude 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.
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.
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.
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tate 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.
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tate 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 decision-
making 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
your direct personal possession.
However, this is an incorrect assumption, andthere 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.
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.
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
When you convey assets
into a revocable living
trust they won’t 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.
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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.
REFERENCESNolo http://www.nolo.com/legal-encyclopedia/revocable-living-trusts.html
Investopedia
http://www.investopedia.com/articles/pf/06/revocablelivingtrust.asp
About the Author
arry Zimmer engages in a Wealth Care Practice. Specific services include include basic and advanced trust planni
ust estate settlement; probate estates; trust beneficiary advocacy and representation; asset protection; busines
rganization; business succession planning; and pre-marital planning.
is goal is to make creating a Wealth Care and Estate Plan the first step in a relationship that is satisfying and unli
ient's experience with any other lawyer.
The Zimmer Law Firm
9825 Kenwood Road, Suite 201
Cincinnati, OH 45242
Phone: (513) 721-1513