if i put property in a revocable trust, will that keep creditors fromgetting their hands on it?

Question

I want to leave my property to my children. One is very ill and has no other income but this. Can any crediotrs of mine attatch liens or take this property if i put it in a revocable trust?

Answer 1

No. It does not provide any creditor protection. Generally speaking - if you retain the power to revoke the trust, in whole or in part, the trust property is subject to the claims of creditors.

In order to truly protect assets through a trust one must generally enter into an irrevocable arrangement. The downside is that you generally lose control of your assets in an irrevocable trust.

The laws of most states permit the formation of a variety of revocable trust instruments (AB Trusts, QTIP Trusts, Crummey Trusts, Retained Interest Trusts such as GRITS, GRATs, GRUTs, and QPRT), whereby the trust creator contributes assets for the benefit of others to be managed by a Trustee.

While it is also possible for the creator to be either the Trustee or a Beneficiary of the trust created, such dual capacities will usually destroy the trust's ability to shelter its assets from creditors of the trust creator.
http://ezinearticles.com/?Revocable-Trust-(Revocable-Living-Trust)-vs.-Irrevocable-Trusts&id=448578
http://www.1800probate.com/resources/revocable-living-trust-protect-from-creditors.html
http://www.miamiherald.com/business/columnists/meg_green//story/199774.html

Family Limited Partnership:
http://www.legalzoom.com/legal-articles/article13910.html

You should talk to an estate planning attorney in your state. It will be worth the money.
http://www.search-attorneys.com/

Answer 2

If it is a revocable trust -- generally it provides no protection from creditors, because too many people have used revocable trusts to try and avoid credit problems.

An irrevocable trust -- that is usually sufficient -- but different states have different laws about what you need to do to prove that your intent was really to give to the beneficiaries, as opposed to just avoid your own debts.