does a revocable living trust protect assets in iowa

A Look at Revocable Living Trust, Who Needs It, and Why a Simple Last Will May

Not Be Your Best Option When It Comes to Asset Protection

DOES A REVOCABLE LIVING TRUST PROTECT

ASSETS IN IOWA?

DENNIS D. DUFFY Iowa Estate Planning Attorney

http://www.duffylawoffice.com/estate_planning/index.php/estate-planning/

Does a Revocable Living Trust Protect Assets in Iowa? www.duffylawoffice.com 2

There are numerous different legal devices that are routinely utilized in the field

of estate planning. The correct course of action will vary depending on the

objectives of the individual in question.

There are people who automatically believe that they should use a last will to

direct future asset transfers. Some of them will even go online and download

generic last will documents. They fill in the blanks and they think that they have

an effective estate plan in place.

In fact, there are many things to take into consideration, and a simple last will

may not be your best option. As a case in point, consider the matter of asset

protection.

ASSET PROTECTION: WHAT IS IT & WHO NEEDS IT?

Asset protection involves taking legal steps to insulate financial assets from

monetary judgments. People who are prone to lawsuits or other types of

liabilities often engage asset protection strategies. Others who simply want to

be safe without having any particular expectations of being subject to a


judgment may be interested in asset protection as well.

People who are in certain lines of work are naturally more prone to legal actions

than others. Imagine the life of a surgeon. This individual is taking on enormous

responsibilities each and every day, and any perceived misstep could result in a

lawsuit.

A person in this line of work would definitely want to take steps to protect

assets. There are many other lines of work that can also leave you open to

lawsuits, such as real estate investment and development. Tenants could decide

to sue claiming that you are negligent if they were injured on your property.

Clearly, someone who is in this position would want to take steps to protect

assets.

REVOCABLE LIVING TRUSTS

The most commonly used alternative to a last will would be the revocable living

trust. If you didn't know about all the different options that are available to you

when you're planning your estate you may assume that it is a choice between a

last will and a revocable living trust.

Let's say that you made this assumption and you did in fact want to make sure

that your assets were protected. You think that you are divesting yourself of

personal ownership of assets when you place them into a trust of any kind. You

decide to create a revocable living trust using a template or down load that you

purchased online thinking that this is the way to protect your assets.


If you were to take this course of action you would be making a big mistake.

Revocable living trusts do not provide asset protection.

Let's look at the anatomy of such a trust. The person who creates the trust is

known as the grantor or settlor. The grantor names a trustee to administer the

financial assets that have been placed into the trust. He or she also names a

beneficiary or beneficiaries. The beneficiary will receive monetary distributions

out of the trust. These distributions are made in accordance with the terms of

the trust that are created by the grantor.

When you create a revocable living trust you can serve as both the trustee and

the beneficiary while you are still alive and in full control of your faculties. As

such, you retain total control of the resources. Many people find this to be a

positive because they don't want to hand the control over to someone else.

In addition, remember the name of the device: it's a revocable living trust. This

means that you as the grantor have the right to revoke or dissolve the trust at

any time. You can simply revoke the trust and go forward using the money

and/or property that you placed into the trust in any way that you choose.

Because you can act as both the trustee and the beneficiary coupled with the

fact that you have the right to revoke the trust you are retaining incidents of

ownership. You are not legally prevented from using the trust's resources to

satisfy judgments. As a result, the property that has been placed into the trust

is indeed fair game for claimants seeking address.


REVOCABLE TRUSTS & PROBATE AVOIDANCE

Why would you want a revocable living trust if

you are not getting any asset protection from it?

The answer is that these trusts facilitate probate

avoidance.

If you pass away with resources in your personal

possession and you state your wishes regarding

the distribution of these assets in your will the

property that you own becomes probate property.

This property is not distributed to the heirs until

the probate court has closed the estate.

There are a few reasons why people often times

take steps to arrange for distributions to their

loved ones outside of probate. One of them is the

fact that probate takes time. Exactly how much

time it will take varies on a case-by-case basis.

Simple cases can take months, more complicated

cases can take years.

Even if the people on your inheritance list don't

need the money immediately you may want to

engage probate avoidance strategies to make

things more efficient for them. However, in some

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cases immediate liquidity is greatly needed, and in these situations probate

avoidance is all the more important.

When you convey assets into a revocable living trust the beneficiaries receive

distributions outside of the probate process.

VIABLE STRATEGIES

Although revocable living trusts don't provide asset protection, there are other

viable strategies that can be employed. The best way to explore them would be

to set up a consultation with a licensed estate planning lawyer.

REFERENCES

Nolo http://www.nolo.com/legal-encyclopedia/revocable-living-trusts.html Investopedia http://www.investopedia.com/articles/pf/06/revocablelivingtrust.asp


About the Author

Dennis D Duffy

Dennis Duffy combines an extensive background in business with a

wide range of legal experience to provide his clients with a uniquely

practical perspective. An attorney since 1989, he practices primarily in

Estate Planning, Wills, Trusts and Probate. Mr. Duffy also offers

frequent educational seminars on a variety of estate planning topics to

both the general public and private groups in the Quad Cities area.

Experience

Mr. Duffy has been practicing law since 1989, when he joined the general practice firm of

Bozeman, Neighbour, Patton & Noe in Moline Illinois. In 1990, Mr. Duffy and five other

attorneys founded the law firm of Anderson & Nelson, with offices in Rock Island, Illinois and

Davenport Iowa; the firm eventually grew to 12 attorneys, with Mr. Duffy as managing

partner. He founded Duffy Law Office in 1995.

Before returning to school for his advanced law and business degrees, Mr. Duffy worked for

nearly a decade for Per Mar Security & Research Corp. in Davenport, as Vice President.

Mr. Duffy is a member of the American and state bar associations of both Iowa and Illinois as

well as the Scott and Rock Island County Bar Associations.

He is an executive member of the American Academy of Estate Planning Attorneys. He is co-

author of the book Estate Planning Basics – A Crash Course in Safeguarding Your Legacy.

Also, the American Academy of Estate Planning Attorneys announced that Mr. Duffy was

honored with the Academy Fellow designation. The Fellow program recognizes Academy

Members who demonstrate advanced expertise and significant practical experience in the

estate planning, trust, tax planning, guardianship, probate and estate administration fields.

Duffy Law Office

Helping Families Preserve their Wealth

www.duffylawoffice.com

1840 E. 54th Street

Davenport, IA 52807

(563) 445-7400


does a revocable living trust protect assets in iowa

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