Trusts Attorney in Menlo Park, California
Do trusts always protect assets from creditors?
Do trusts always protect assets from creditors?
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the words living trust are the words
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that everyone uses when they describe a
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trust that is a will substitute and
00:11
that’s not a legal term that’s just the
00:13
what everybody calls a revocable or
00:15
irrevocable grantor Trust is the legal
00:18
term for it and that does not help in
00:22
any way the client have creditor
00:27
protection California has a statute that
00:29
says if you create a trust then you’re
00:31
not getting credit or protection for it
00:33
but if you have a trust that at your
00:36
death or you create a trust during your
00:38
life that gives assets to someone else
00:40
now that Trust can have creditor
00:43
protection so that’s why when we’re
00:45
making gifts to children we say put it
00:47
in trust for the child and when I say
00:49
put it in trust for the child
00:51
it’s another paragraph inside the living
00:53
trust people don’t understand that when
00:56
they sign a living trust a husband and
00:57
wife sign a trust or a single person
01:00
signs of trust it’s one trust and
01:02
they’re living with it but then when
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someone dies other trusts bring out of
01:07
that trust normally and the paragraphs
01:11
in that document are the paragraphs for
01:13
the trust that spring out of that trust
01:15
so if I had a trust for my child and I
01:17
said they they couldn’t be the trustee
01:19
until they’re 25 but they can use all
01:22
the income and they can get principal if
01:24
they need a house or whatever and all
01:25
those terms about my child’s trust
01:28
that’s inside my living trust and
01:30
there’s never another document so until
01:33
that child’s 25 or 30 or for their life
01:36
they’re gonna hold up that document that
01:37
you signed that the clients prepared in
01:40
2020 that’s their trust and it’s all the
01:43
trust that come out of it all in that
01:45
document a hundred years from now they
01:46
could hold up that document and that if
01:48
their trust still in existence that’s
01:50
the document if it has the words in it
01:52
well all those trusts that spring out of
01:54
that living trust after the client dies
01:57
those are all judgment proof whoever
01:59
gets it why because the person didn’t
02:01
create it they got it like that you know
02:03
sometimes when people come in and they
02:07
don’t have children or they’re not
02:08
really thinking of gifting to children
02:10
or whatever it is and I’m talking to
02:11
them about themselves I say are your
02:13
pair
02:13
it’s alive and they say well yeah one of
02:15
them is and I’ll say okay why don’t you
02:18
get them to change their document to put
02:20
a your inheritance in trust and they say
02:22
well I’m pleased talking about I don’t
02:23
need a trust I’m 60 years old or
02:25
whatever I say yeah but if they give it
02:28
to you in trust you have creditor
02:30
protection and when you die it’s not
02:32
gonna be subject to tax up to a certain
02:34
amount so wouldn’t you like to have
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assets that are judgment proof if your
02:38
parents leave them to you like that
02:40
you’re gonna have a trust that no one
02:41
can touch but it can’t be you creating
02:44
it for yourself
02:46
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Menlo Park, CA estates and probate lawyer Mary White explains how to use a trust to protect assets from creditors.
