If you’ve accumulated considerable assets, you want to do everything legally possible to protect those assets from lawsuits, taxes and creditors both while you’re still around and after you are gone.

There are a variety of ways to protect your home and other assets, including:

  • Liability insurance
  • Declaration of Homestead
  • Dividing your assets with your spouse

There are also a number of types of trusts that you can use to protect your assets. People generally associate trusts with setting money aside for heirs and beneficiaries. However, people can also use them to protect their assets both from claims against them and against the people who will eventually inherit the assets.

Asset protection trusts have to be set up properly, however. For example, the trust must be irrevocable. That means that you no longer control the money or other assets in the trust. It’s also important to restrict the beneficiary’s access to the trust. The more access the beneficiary has, the greater the likelihood that a creditor or plaintiff in a lawsuit can take from it.

There are rules about transferring assets to a trust for the purpose of keeping them out of other people’s or entities’ hands. For example, they can only protect the assets from claims made after the trust was established.

These and other transfers are considered to be fraudulent. That means that a creditor can access the funds. For example, if a person makes a transfer to a trust specifically for the purpose of defrauding a creditor, that’s considered fraudulent. So are transfers meant to protect your assets from being used to pay debts a person never intended to pay.

An asset protection trust provides no guarantee that creditors and others who have a claim to your or your beneficiary’s money can’t get it. However, if set up correctly, with the guidance of an experienced Texas estate planning attorney, it may be your best chance at ensuring that your assets aren’t lost.