Kroener Hale Law Firm

We are here to listen, learn & help

TEXTS ONLY: 513-828-7510

We are here to listen, learn & help

TEXTS ONLY: 513-828-7510

During these hard and uncertain times, the staff at Kroener Hale Law Firm are still here to serve you. Please contact us at any time to schedule a free 30 minute telephone/skype consultation to discuss your legal needs. We will continue to diligently protect the rights and interests of our clients through these tough times.

Providing The Advice & Guidance You & Your
Family Need To Make Informed Decisions

Providing The Advice & Guidance You & Your Family Need To Make Informed Decisions

In times when people may be suffering under the weight of business or personal debts, Ohio residents may fear a judge can award any of their personal sources of wealth to a creditor, even the assets placed in a living trust. However, there are circumstances that keep assets safe within a trust, even from creditors. It all depends on which type of living trust an individual transfers assets into.

A report by FEDweek describes how living trusts work. The two main types of living trusts are revocable and irrevocable trusts. With a revocable trust, an individual maintains control over the assets. Conversely, in setting up a irrevocable trust, a person surrenders assets over to a trustee. Still, while someone can retain greater control over assets in a revocable trust, the downside is that the trustor cannot enjoy tax benefits, plus the assets are still subject to creditor claims.

However, according to a piece in the Straits Times, an irrevocable trust can protect assets from creditors. Since a person no longer owns the assets in the trust, a creditor has a much harder time laying any claim to them. For example, the article recounts an instance where a woman established a living trust that shielded her residuary estate from creditors seeking to claim her husband’s assets after his business went bankrupt. Additionally, a person may also set up a living trust in the name of an offspring. In the eventuality that a person gets divorced, the assets placed in the trust will not be subject to any judgments from the divorce proceedings.

While someone may lose a lot of control over assets placed in an irrevocable trust, the tradeoff is that the person’s assets are better protected from creditors seeking to collect on the trustor’s personal or professional debts. The security of irrevocable trusts also allow for protections against judgments resulting from divorce cases and other forms of asset confiscation.