Can you protect your money with a trust?

30 Apr 2024 · 1 min

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In this segment, Jerry Taylor answers the question of whether a trust can shield assets from lawsuits. He explains that only certain irrevocable trusts can provide such protection, while revocable trusts—though the most common—do not protect assets but merely help avoid probate for heirs after death. He outlines that irrevocable trusts are typically used for lawsuit protection, asset protection, or tax benefits, and notes that there are various forms of irrevocable trusts each with their own advantages and disadvantages, which determine the level of liability protection they offer.

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The question is, can I use a trust to protect my assets from lawsuits? The answer to that is yes, you can, under certain conditions. To get that protection, the type of trust you use must be some type of an irrevocable trust. It cannot be a revocable trust. A revocable trust, which is the most common type of trust that you hear about, that's the one that most people have, that will not provide your assets any protection from lawsuits. Yes, it will get you around probate. That's the primary purpose of a revocable trust, avoiding, uh, the probate process, your heirs when you die. An irrevocable trust is typically done for lawsuit protection or asset protection for the assets that you have in that trust, or for tax reasons. But when it comes to irrevocable trust, there are certain kinds of irrevocable trust that have benefits and downsides. And that is how you get the protection, the liability protection