The Benefits of a Trust for a Beneficiary

A person who is expecting to receive money from a parent or other family member may be thinking ahead as to how that money should be spent. However, individuals who receive an inheritance may not be thinking about a divorce or a future creditor claim. Here are some ways that a trust can protect a person’s money or other inherited assets.

Assets in a Trust May Not Be Subject to Creditor Claims

If a beneficiary does not have direct access to the items in a trust, they cannot be used to satisfy a past due debt or a judgment against an individual. Therefore, the grantor of the trust must take steps to ensure that the document is structured properly. Ideally, it will either be an irrevocable or revocable trust in which a child or other beneficiary only benefits from income generated by an asset. For instance, interest from a series of loans could be used to pay for a child’s future educational expenses or medical bills.

Assets Could Be Labeled Separate Property

Assets that are kept in a trust are typically labeled as separate property in a divorce proceeding. This means that they are not subject to division in a final settlement. In addition to a trust, an individual may want to create a prenuptial agreement stating that any inherited money or assets are considered separate property.

Your Lawyer May Be of Assistance

Working with an estate planning lawyer Las Vegas may be helpful in ensuring that assets are properly protected now and into the future. By taking time to put safeguards in place today, a family may be able to retain its wealth for generations into the future.