Will a Trust Protect My House from Creditors?
Both revocable and irrevocable trusts can protect your house (or other assets) from creditors including the IRS, but neither provides total protection. Consult with an estate planner to create a trust to protect your current assets for your future beneficiaries. Use your trust to protect your assets from medical debt and other end-of-life expenses.
Because assets can move in and out of a revocable trust, they offer less protection against creditors. However, if you appoint someone other than yourself as the trustee, you legally lose control over the trust making it more difficult for anyone to place a lien against the assets in the trust.
Irrevocable trust offer more protection, however, they also are more difficult to create and maintain. Irrevocable trusts operate as independent entities, responsible for filing tax returns annually, just like a living person.
While irrevocable trusts offer more protection, your estate planner can probably use a revocable trust to protect your assets without the challenges that come with irrevocable trusts.
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