• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Overland Park Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s FAQs
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
      • Overland Park Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Edmond
    • Midwest City
    • Moore
    • Norman
    • Oklahoma City
    • Yukon
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Guardianship » The Revocable Living Trust and Protection Against Creditors

The Revocable Living Trust and Protection Against Creditors

June 22, 2011 by Larry Parman, Attorney at Law

One of the most common mistakes people make concerning the Revocable Living Trust is in thinking that this type of trust offers protection against creditors. The simple fact is that this trust will not provide any protection against creditors and debt collection because any assets held in that trust are still considered to be yours.

When deciding if you need a Revocable Living Trust as part of your estate plan, it is important to know exactly what this type of trust will do, and what it won’t do. What the Living Trust does, if properly structured and if assets are correctly titled in the trust name, is help you plan better for estate taxes, so that when the first spouse passes away, the estate tax is reduced as much as possible. The second reason for having a Living Trust is that it can help avoid probate after both spouses die.  If the trust belongs to an unmarried individual, then the Living Trust will accomplish both of these things as well.

Although there are methods of protecting assets from creditors, the Revocable Living Trust will not accomplish this. The main reason is that the Grantor (the person who creates the trust) can add and remove assets from the trust at any time.  They can also revoke the trust.  These are reasons why the assets in that trust are still considered to be the assets of the trust’s creator.  At one time an irrevocable Living Trust did provide some asset protection, but recent court decisions have held that assets in an irrevocable trust belong to the Grantor of the trust and therefore offer no creditor protection.

Basically, a trust will only provide protection for the beneficiary, if a third party creates the trust and places assets in the trust. For example, you can create a trust and fund the trust, making a grandchild a beneficiary. Properly designed, the trust will protect those assets from creditors and divorce of the grandchild because the beneficiary never had control of the assets funded to the trust.

If you are interested in lowering your estate taxes and reducing the chance that your estate will go through probate, then the Revocable Living Trust could be the answer. If you are interested in asset protection, you will want to contact an attorney that specializes in this area of law.

Larry Parman
Founding Attorney

  • Author
  • Recent Posts
Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
Latest posts by Larry Parman, Attorney at Law (see all)
  • Estate Administration 101 - February 2, 2023
  • Why Do You Need an Elder Law Attorney? - January 31, 2023
  • Inheritance Planning for Blended Families - January 26, 2023

Filed Under: Guardianship Tagged With: Estate Planning Consultation, Farmers & Ranchers, Financial Planning, Free Estate Planning Reports, Health Care Proxy, healthcare

Other Articles You May Find Useful

incapacity planning
Take Proactive Steps to Prevent a Guardianship
Parman & Easterday
Estate Planning For Domestic Partners
Overland Park estate planning attorney
Are Your Assets In Harm’s Way?
overland park probate attorneys
Understanding Guardianship Proceedings in Probate Court
Parman & Easterday
How Does a Court Choose a Guardian or Conservator?
Parman & Easterday
Guardians, Conservators, and More – What Does a Guardian/Conservator do?

Primary Sidebar

Parman & Easterday, LLP

DOWNLOAD OUR FREE ESTATE PLANNING CHECKLIST

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place
Tulsa, OK 74133
Phone: (918) 615-2700

MAP

parman_sidbr_map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 12:00 PM

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube