An irrevocable trust could prove an essential estate planning tool if you fear someone else will take your assets. It can help you to preserve them for the beneficiaries you choose.
Here are some people that an irrevocable trust could keep your money safe from:
1. Medicare providers
You can put money into a trust to reduce your estate and get it below the Medicare threshold for free care. Medicare providers will be keen for you to pay as much as possible and may even lay claim to assets you transfer to relatives while still alive if the transfer happened within a certain number of years of you needing treatment.
2. Creditors your owe
Many people die before they have finished paying their debts off. While creditors realize they will lose much of what is owed, they’ll try where they can to reclaim something.
Estate executives must settle eligible debts before they can distribute what remains to the beneficiaries. That could not only delay distribution to the beneficiaries but diminish what they receive. Unless that is, you use an irrevocable trust. Once you move assets into the trust, they no longer belong to you, so a creditor cannot claim them.
3. Your children’s partners
Your kids may be happy to share their inheritance with a spouse or partner, using it for the house or other things. Keeping it in a trust for them makes it easier to say no if they wish, which is especially important if you fear their relationship will not last.
Seek legal help to discover more about using an irrevocable trust to protect your assets from others.