Does a living trust protect you from creditors?

Typically, no. Since a living trust, by definition, is revocable, that means that you always have a right to take back the trust property until you die. This means those assets have no better protection from creditors under the law than if you owned them outright.

After the trust becomes irrevocable (the last person with a right to revoke the trust passes), the trust may then offer some creditor protection to the beneficiaries of the trust. But, this creditor protection is dependent on how the trust is drafted. A poorly drafted trust may have no creditor protection at all for your beneficiaries. A properly drafted trust may have no creditor protection either if the property is to be distributed to the beneficiaries outright immediately at the time of your death.


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