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Klenk Law

Trust Lawyer Cherry Hill, NJ

Can a Trust Protect You in Bankruptcy?When people start estate planning, the most common type of trust that comes to mind is a revocable living trust.  But, while a Revocable Trust has many uses, asset protection is not one of them.  A Revocable Living Trust is entirely available to your creditors.

If you have a large number of assets and are worrying about a future, potential lawsuit, it would be recommended for you to contact a trust lawyer Cherry Hill, NJ has confidence in to help create an irrevocable trust.  There are many types of irrevocable trusts, but these are the types of trusts that protect from your future creditors.

So, if you put your assets in a trust, do they work in bankruptcy to change the rights of the creditors after the money and the debtors who owe the money? If you are concerned about losing your hard-earned assets to creditors, it is recommended to speak with NJ trust lawyer from Klenk Law.

Revocable Trusts

A revocable trust is known also as a living trust. The person who is putting their assets in the trust creates the revocable trust during his lifetime. The grantor, who creates the trust, can make changes to the trust at any time and even has the right to revoke the entire trust. A Cherry Hill, NJ trust lawyer can explain that the main appeal of a revocable trust is that the assets owned by the trust do not need to go through probate at the time of the grantor’s death. Instead, the terms outlined in the revocable trust determine who receives the assets in the trust. The title for any assets in a revocable trust will now read “John Smith, Trustee.” The asset would appear to be no longer in John’s possession but is now the Trust’s asset.

Revocable Trusts and Creditors

The same quality that makes a revocable trust so appealing, that it can be amended or revoked at any time, is the same quality that does not make it useful as a tool to protect your assets. The law states that if the grantor can revoke the trust, the grantor is still viewed, and treated by the law, as the owner of the assets. A revocable trust does not change anything in terms of the grantor’s exposure to their creditors. If bankruptcy schedules ask for a list of your assets, you are required to list the property in your revocable trust.

Irrevocable Trusts

An irrevocable trust is a living trust in which the trust cannot be modified or revoked at a time. The trust terms can state that assets are now unavailable to the grantor. With an irrevocable trust, you do receive protection for your assets, but you lose all flexibility. To determine if creating an irrevocable trust makes the most sense for your situation, it would be advisable to speak with an NJ trust lawyer to explore all your options.

There is a law against fraudulent transfers. This law protects creditors who have a claim against you at the same time you funded the irrevocable trust. The reasoning of this law is that you cannot get out of paying your debt by giving your property to a trust. State laws and the trust’s terms will decide the rights of creditors to money that is paid from an irrevocable trust.

Schedule a Consultation

You have worked hard to earn your assets. If you are worried that you could face creditors and want to protect your assets to pass them down to your future generations, you should contact Klenk Law to discuss all of your options. Read more about irrevocable trusts in my article New Jersey Irrevocable Trusts.  We can work to help you find a suitable option to help keep your family taken care of for years to come.

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Peter provided outstanding advice and preparation of a will and trusts.

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Peter was excellent. He explained everything very clearly and is super friendly. My wife and I originally tried using a lawyer through group legal coverage, but unfortunately the old adage - "you get what you pay for" - applied to the other lawyer, and we decided to go with a real professional.

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When it came down to picking the right attorney to handle my affairs, I knew right away it was this firm. From speaking to their secretary to speaking to Peter I knew I was making the right decision. After only a few mins Peter knew right away what I was looking for and handled all my questions professionally and even gave me great feedback that put my mind at ease. All that without even giving a single penny! So of course I hired him! So far so good...

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AWESOME LAWYER! Peter Klenk is an exceptional attorney and a very nice person! Today I spoke with Peter about estate planning and was impressed with by his professionalism, cordiality, and attention to detail. I highly recommend Klenk Law for probates, wills, trusts, and other issues germane to estate planning!

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Like another reviewer, I contacted Peter through his website using the free consultation link, for a question regarding PA inheritance taxes. The question was quite technical and difficult to explain, and the answer was nowhere to be found on the web. Peter grasped precisely what I was asking, and provided a clear, helpful response (with a touch of humor) the very next day.

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Peter is excellent. I had a very complicated situation with my parents' estate planning and potential Medicaid needs. Peter was very knowledgeable in estate planning matters, able to define the best solution for the situation. Additionally, he was congenial and able to communicate effectively to my senior citizen parents the benefits of estate planning. He earned my trust, and more importantly, my parents' trust in a 45 mins consultation period. Highly recommend Peter. He is very easy to work with.

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Peter provided outstanding advice and preparation of a will and trusts.

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Peter Klenk made a complex subject understandable and allowed us to move forward with our estate planning. He was patient with our questions and creative in the solutions he proposed.

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