Irrevocable Trust are a great asset protection strategy. An irrevocable trust is a type of trust that may not be amended. Thus, the person that is creating the trust is re-titling the asset (i.e. real estate) outside their name. Hence, this person does not have control over the asset. Due to a lack of control, your creditors should not be able to seize the assets in the irrevocable trust.
Yesterday, I spoke with a financial advisor that referred his childhood friend. This friend is 59 years of age and is involved in the real estate business. During the good years, we know that real estate was a great way to make a lot of money. However, right now real estate is a tough market. Thus, this friend is considering bankruptcy. Possible, if you are in a situation like this, there are other alternatives. The first alternative may be an irrevocable trust. You cannot hinder, shelter, or defer payment to creditors. Therefore, we must evaluate whether the fraudulent transfer doctrine prohibits you from making any such transfers.
The major point is irrevocable trust are great for asset protection. Unlike domestic asset protection trust that are questionable, irrevocable trust are solid. The big difference is with an irrevocable trust you give up control to a trustee. In contrasts, an domestic asset protection trust gives you semi-control and in my opinion, domestic asset protection trust are unlikely to work in the state of Illinois.
Sean Robertson, Attorney at Law (Tax)
Robertson Law Group, LLC
312-498-6080 (all offices) or 630-364-2318 (Naperville)
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