Through a lifetime of hard work and prudent investing you have amassed a decent estate to leave behind for your loved ones when you die. The idea is that the assets you leave behind will remain in the family. However, you might be surprised at how quickly and easily those assets can be lost after your death as a result of bankruptcy, divorce, creditor claims, or even waste by a beneficiary. How can you make sure assets remain in the family after your death then? One way is to create a trust agreement to hold you assets while you are alive and then allow the trust to provide for your loved ones after your death.
Like most people, you may not have given the loss of your assets much thought. If not, now is the time. You likely thought the difficult part was amassing the assets in the first place, not hanging on to them after death. The reality is that assets you gift to loved ones in your estate plan can be lost as a result of a number of events, including:
- Divorce – though inherited assets are typically not considered marital property that changes if they are co-mingled – something that occurs all the time without the owner of the assets even being aware. Once an asset can be categorized as marital property it can be lost in a divorce.
- Bankruptcy — a personal or even business bankruptcy of a beneficiary could result in the seizure and sale of an asset.
- Spendthrift beneficiary – a beneficiary may develop an addiction or simply not know how to manage money, resulting in the rapid loss of gifted assets.
- Creditors – creditors of a beneficiary or spouse could file for a lien against the asset to satisfy a debt.
The best and simplest way to avoid losing family assets after your death is to create a trust agreement now. All of your important assets can then be transferred into the trust and managed by a professional Trustee. After your death, the terms of the trust will dictate when and how your loved ones receive their share of the trust assets. The important part is that the assets will be safe in the trust and out of the hands of creditors, spouses and even responsible beneficiaries.
If you have additional questions or concerns about trust agreements, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.