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If I told you an inheritance can be left to whomever you want, without the fear that it could be taken by a lawsuit, bankruptcy or even divorce, would you want that benefit included in your plan? In today’s litigious society, asset protection is a critical component in anyone’s estate plan.

Our clients make sure the inheritance they leave their loved ones is protected. With a properly drafted trust, you can rest in peace knowing that the money you left behind will be used by your loved one, and not unintended people who could possibly take it from them.

We recently won a case for the son of a client because our client had the right language in his trust. I first met our client several years ago to review and update his estate plan. He did not think, at that time, that any of his children were going to be in any financial trouble. After our conversation, he made clear that the assets (his home and some savings) were to go to his children, and not to any future creditor (either a plaintiff in a lawsuit or bankruptcy trustee) because we discussed that risk and the need for assets protection. These were not current issues, but proper planning is using foresight to plan for life’s uncertainty.

Unfortunately, we had to utilize his plan a little sooner than we had hoped. Our client passed last year. After we were hired to assist with the administration of the trust we learned that one of our deceased client's sons was going through a bankruptcy. The trust we drafted was going to be put to the test.

We were asked by the son's bankruptcy counsel in another state to appear in the bankruptcy proceeding and defend the language in the trust document we had drafted for the bankruptcy debtor's father. We prepared our oral arguments and drafted a brief explaining to the judge how the trust works, and that the bankruptcy trustee was not entitled to any of the inheritance. The judge ultimately agreed. Every single penny of the inheritance was protected from the bankruptcy because of language we included in our trust document. And once the bankruptcy is settled, our client’s son will be able to use the inheritance to rebuild his financial life; because it is available to him, just as his dad intended.

And asset protection is not only for the rich. We frequently hear clients refer to their estates as "modest," but as the case we just went through tells us, even a modest inheritance of $50,000 can be worth protecting. Especially when you consider your heirs potentially losing the inheritance you leave them to an unintended third-party, it might seems more valuable, and perhaps worth more effort to protect. But to have this kind of asset protection in place, you have to plan ahead of time.

Come and talk with one of our estate planning attorneys and see how we can make asset protection a cornerstone to your plan.





Contributed by Morris Hall Attorney and Partner James P. Plitz


What the Attorneys of Morris Hall, PLLC Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Green Valley, Prescott, Sedona, Flagstaff and Arrowhead. Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

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