Living trusts are an alternative form of estate planning. It allows the creator to specifically control their assets with consideration of family dynamics. You can use them to pass ownership of real estate to another person upon your passing. This is commonly done. One of the main concerns of those using a living trust is the ability of creditors to seize property or demand payment for it upon the transference of ownership. After all, it was your property and debt, not your heirs, right?
Well, that does not matter. Your debt is attached to the specific property, not just the owner. You may want to try to avoid your heirs having to pay back the debt on your home or rental properties, but you cannot. Although your living trust will conceal who your estate is transferred to, real estate ownership is a public record and can easily be found. This allows creditors to find who has ownership of the property and demand payment of the debt attached to the property. Creditors may make alternative payment schedules with heirs of property to accommodate them and still get paid the debt that is owed.
The Ashcraft Firm is an estate planning attorney serving the Temecula, CA area. We assist clients with all their estate planning needs including will creation and living trust formation. Our attorneys always keep the client’s best interest and provide legal advice based on your needs. Contact us today to schedule your estate planning consultation!