can a trust protect assets from child support?
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Unfortunately, under the laws of some states, regardless of whether a trust has a spendthrift provision or is a discretionary trust (or both), a beneficiary's children and/or a former spouse may have rights to reach trust assets that are otherwise protected from creditors.
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If my assets are owned by a living trust, they are protected from nursing homes. Assets owned by a living trust are vulnerable to nursing homes costs and are counted when determining financial eligibility. However, other types of trusts may be used to protect assets.
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An Irrevocable Medicaid Asset Protection Trust protects assets from the costs of long term care due to a long-term nursing home or assisted living stay. ... So, a properly created trust that protects assets from a nursing home results in the trust creator losing control over the assets placed in trust.
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A revocable living trust, on the other hand, does not protect your assets from your creditors. This is because a revocable living trust can, by its terms, be changed or terminated at any time. Due to these terms, the trust creator maintains ownership of his assets.
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So while irrevocable trusts can protect assets from being counted by Medicaid (depending on whether the trustee has discretion to spend the assets), Medicaid will still count the transfer of the assets to the trust as a disqualifying transfer.
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Trusts can provide protection for your wealth and tax advantages such as income splitting to reduce the aggregate taxes payable by you and members of your family. ... For example, your adult child and his or her children (your grandchildren) can receive income and capital distributions during your lifetime.
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As the grantor or creator of an irrevocable trust, if you place assets into one before your marriage, these are never marital property and are never at risk in a divorce. You don't actually own them when you marry – your trust does. The downside, of course, is that an irrevocable trust is forever.
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Buying a Home with an Irrevocable Trust The trustee acts as a fiduciary who is responsible of managing the assets for the beneficiary. ... Irrevocable trusts can protect assets from creditors given that assets were put into them before there were credit problems.
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One type of trust that will protect your assets from your creditors is called an irrevocable trust. Once the trust creator establishes an irrevocable trust, he or she no longer legally owns the assets he or she used to fund it, and can no longer control how those assets are distributed.
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Single People. Anyone who is single and has assets titled in their sole name should consider a Revocable Living Trust. The two main reasons are to keep you and your assets out of a court-supervised guardianship and to allow your beneficiaries to avoid the costs and hassles of probate.
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Why Creditors Can Get to Assets in a Revocable Living Trust Revocable living trusts don't, however, protect your assets from people with legal claims against you. That's because although the trust is a legal entity, for legal purposes you're treated as the owner of the trust assets.
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["No one (not even the surviving spouse) can have the power to distribute any principal from the trust during the spouse's lifetime to anyone other than the spouse.", 'The trust income cannot be terminated by remarriage or any other event.']
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Some Trusts Protect Assets from Divorce. In California, trusts established before marriage are considered separate property. Other trusts — including domestic or foreign asset protection trusts, revocable trusts and irrevocable trusts — also protect assets in the event of divorce.
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An irrevocable trust has a grantor, a trustee, and a beneficiary or beneficiaries. Once the grantor places an asset in an irrevocable trust, it is a gift to the trust and the grantor cannot revoke it. ... To prevent beneficiaries from misusing assets, as the grantor can set conditions for distribution.
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With a revocable trust, your assets will not be protected from creditors looking to sue. That's because you maintain ownership of the trust while you're alive. Therefore if you lose a lawsuit and a judgment is awarded to the creditor, the trust may have to be closed and the money handed over.
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Under Ohio law, assets passing to your spouse or children through the trust are not subject to the claims of creditors, including medical creditors. ... It's also advisable to consult with an experienced estate planning and elder law attorney to discuss ways to protect your spouse and heirs from medical debt after you die.
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So, to be absolutely clear: A revocable living trust does not protect assets from creditors. What Is an Irrevocable Trust? An irrevocable trust, on the other hand, may protect assets from creditors. In fact, you may see the term “asset protection trust" used to describe such a trust.