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The Role of Irrevocable Trusts in Protecting Assets from Creditors

irrevocable trusts

Irrevocable Trusts in Georgia: Why Do You Need Them?

Irrevocable trusts offer key benefits in an estate plan. They protect assets from judgment creditors by transferring ownership to a trustee, who then manages them. This prevents creditors from seizing assets to satisfy judgments against the grantor.

While primarily used for asset protection, an irrevocable trust can also reduce estate taxes and control asset distribution by removing ownership from the grantor.

What makes an irrevocable trust a valuable tool?

Once established, the grantor cannot easily change the trust’s terms. Only a court order can reverse an irrevocable trust if it finds the grantor intended to defraud creditors.

Business owners often face litigation risks. In today’s litigious world, lawsuits are common. Irrevocable trusts also help protect assets for beneficiaries with functional needs, ensuring long-term care for a child.

The three ways in which an irrevocable trust protects assets from judgment creditors:

  • Transfer of ownership: The grantor transfers ownership of the assets to the trust, which is usually managed by a third-party trustee.
  • Loss of control: The grantor gives up control of the assets and can’t change the trust.
  • Assets are no longer part of the estate: The assets are no longer considered part of the grantor’s estate, so creditors can’t access them.

Once the province of extremely high wealth individuals, irrevocable trusts are now more common due primarily to the litigious times in which we live. If you would like to discuss an irrevocable trust in more detail, give my office a call at (470) 235-7868.

   

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!

 

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