Lins Law Group, P.A.
Serving Families of Tampa Bay for Over 25 Years

In Florida, does a Living Trust protect against claims by a creditor?

When clients ask about setting up a Living Trust (also known as a Revocable Trust), they often want to know if the Trust protects against the claims of a creditor. The answer, like many things in the law, is that "it depends." For the most part, a Living Trust is an estate planning tool to avoid probate and is not an asset protection tool to avoid creditors.

If a person (known as the "settler") sets up a Living Trust, the Trust does not offer any direct creditor protection against claims asserted against the settlor. In other words, if the settler owns an asset that is subject to a creditor claim--such as from a lawsuit--putting the asset in a Living Trust does not protect the asset. The main reason for this is that owning assets in a Living Trust is seen as just an alternate way for the settler to own the asset. But because the Trust is still subject to amendment and revocation, and because the settler still has all benefits of ownership--such as control of the asset--the Trust doesn't protect against creditors. In order to protect against creditor claims, a Trust would have to be irrevocable and the settler could not control the assets.

While not offering greater asset protection, if correctly set up by an estate attorney, a Living Trust also does not cause any greater exposure. In other words, putting the asset in the Trust does not cause it to be less protected. For example, a person's primary residence in Florida is protected homestead and is not subject to the claims of creditors. If placed in a correctly drafted Living Trust, the homestead protection continues even when the home is held in the Trust.

No Comments

Leave a comment
Comment Information
Attorney Michael Lins
ยป View Attorney Profile
At Lins Law Group, P.A., we support members of all branches of the military, including active-duty, reserve and veterans. Thank you for your service!

We Can Resolve Your Legal Issue

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy