A trust is a way to protect everything else that you have. You can set up an irrevocable trust that will protect your assets from legal challenges and claims from creditors. This is sometimes referred to as a living trust, or an inter vivos trust, since it is created while you are still living.
Asset protection trusts are types of trusts that allow you to hold funds for your benefit, but it keeps them shielded from your financial enemies; especially plaintiffs of a lawsuit. So, when someone sues you, the assets belong to the trust instead of you.
A living trust does not protect your assets from a lawsuit. Living trusts are revocable, meaning you remain in control of the assets and you are the legal owner until your death. Because you legally still own these assets, someone who wins a verdict against you can likely gain access to these assets.
Let us take a look at five of the most popular ways to legally hide and protect your money.
Exempt and Non-Exempt Assets
Certain assets are exempt from creditor claims and from lawsuit judgments. They cannot be touched, and you will not lose them. Some exempt assets include ERISA qualified retirement plans (think 401(k) or pension plans) and homesteaded property.
Here are some ways to avoid the freezing of your bank account funds:
The lawsuit is not based on whether you can pay—it is based on whether you owe the specific debt amount to that particular plaintiff. Even if you have no money, the court can decide: the creditor has won the lawsuit, and, you still owe that sum of money to that person or company.
Irrevocable trust
Most trusts can be irrevocable. This type of trust can help protect your assets from creditors and lawsuits and reduce your estate taxes. If you file bankruptcy or default on a debt, assets in an irrevocable trust won't be included in bankruptcy or other court proceedings.
With an irrevocable trust, the assets that fund the trust become the property of the trust, and the terms of the trust direct that the trustor no longer controls the assets. ... Because the assets within the trust are no longer the property of the trustor, a creditor cannot come after them to satisfy debts of the trustor.
6 Steps To Protecting Your Assets From Nursing Home Care Costs
Top 10 Secret Hiding Places For Money
An irrevocable trust allows you to avoid giving away or spending your assets in order to qualify for Medicaid. Assets placed in an irrevocable trust are no longer legally yours, and you must name an independent trustee.
Cash is one of the best ways to hide money from a spouse
Cash is a good way to hide money because it can be done in many ways. Your spouse could cash an inheritance check, then put the cash in a safe deposit box. Or get cash back on everyday purchases and store it casually in a dresser drawer.
Yet No Comments