Does a Revocable Living Trust protect property from creditors?
Unfortunately, in most cases holding assets in a Revocable Living Trust does not shelter your assets from your creditors during your lifetime. A creditor who obtains a judgment against you can collect from the Trust property just as if you still owned it in your name, individually. However, after your death, property in a Living Trust is quickly and quietly distributed to your beneficiaries (unlike property that must go through public Probate proceedings). This expedited process can be quite problematic for creditors. Usually by the time creditors (who are unknown to the beneficiaries) learn about your death, your property may have already been dispersed, and the creditors have great difficulty determining exactly what you owned and where it went. Often, it may not be worth the creditor’s time and expense to try to track down the property and attempt to collect from the new owners (your beneficiaries). Is it difficult to transfer property into my Living Trust? Not at all and remember –
