Your nest egg isn't necessarily safe from bill collectors

In today’s economy, many are struggling and have to field calls from bill collectors. Even if you have good credit, however, your nest egg isn’t necessarily safe.

I thought that a recent post on the Chubb Law Firm blog titled, “Good Credit Doesn’t Mean Your Nest Egg is Safe from Bill Collectors” did an excellent job summarizing the issues that are not all that uncommon in this economy.

“The money that you leave to your beneficiaries may be at risk if they have money troubles. Even though you may think that leaving money to someone who has money problems may be a lifesaver for them, it may not. You see, if you leave cash or property to someone as an outright bequest, it becomes their property. And bill collectors will know about it and will immediately begin proceedings to get their hands on it. This means that the money that you worked hard to earn and wanted to leave to your heirs could almost immediately fall into the hands of bill collectors.”

The advice of an experienced estate planner can help you and your beneficiaries avoid this trap through the use of trusts.

The author continues, noting, “The trust needs to be written with very specific language to provide protection from creditors. But if it is written with liberal distribution instructions, it can allow for nearly unrestricted use of the assets while still protecting them from creditors.”

Although we don’t provide legal advice, “It is important to point out that not every trust will give you protection from creditors. You need specific language in your trust to ensure that the assets are transferred in the right way. Most trusts you create for yourself, often known as living or revocable trusts, do not provide this protection.”

Our estate and financial planning, The Enduring Wealth Method, helps you structure your plan to leave the appropriate amount to your beneficiaries, while protecting your assets in the ways that concern you most. Give us a call to day to take advantage of our The 57-Minute Wealth With Now Regrets Complementary Assessment.

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