California Estate Lawyers Giving You the Representation You Need to Protect Against Creditors and Lawsuits

Everyone wants to ensure that their family and loved ones are taken care of after they’re gone. Wills and other estate planning measures are meant to ensure that money, property, and other assets go to the people we want them to go to. This not only ensures that our worldly possessions end up where we want them but also that the people who matter most to us are being taken care of.

Sometimes, our assets may be at risk from creditors and lawsuits. This could prevent your intended heirs from inheriting certain assets. This is why if you’re planning your estate, you must consult an experienced attorney. They will be able to help you take the appropriate steps to protect all of your assets from potential creditors and ensure your heirs end up with everything you want them to end up with.

What Can Creditors Take in California?

In California, you cannot inherit someone else’s debt. This ensures that friends and family members are not left with someone else’s financial responsibilities after they are gone. However, California is still a community property state. This means that for married couples, certain assets are considered the joint property of both parties. That means if one spouse dies, the other spouse may be responsible for their partner’s debts. In California, creditors may attempt to collect from:

• Joint Bank Accounts
• Life Insurance Benefits
• Retirement Benefits
• Jointly-Owned Property

When someone dies, the executor of their estate must inform all of that person’s creditors. Creditors have one year to collect any debts owed to them from the deceased. Under the law, debts must be paid in a specific order. If, at any point, money runs out, the lower-priority debts do not have to be paid. The order that debts must be paid in is:

• Debts Owed to the State of California or the United States
• Administrative Expenses
• Secured Debts (Mortgages, Loans, etc.)
• Funerary Expenses
• Medical Bills
• Family Obligations
• Unpaid Wages up to $2,000
• General Debt (Credit Cards, etc.)

Many individuals accrue debt as they age, particularly medical expenses. This can mean a spouse is left with heavy debt after their partner passes, which can potentially impact a surviving spouse’s quality of life if the debt is very high. Fortunately, there are steps individuals can take to ensure their assets are protected from debtors and lawsuits.

How Can I Protect My Assets from Creditors and Lawsuits in California?

Multiple legal strategies are available to people wanting to protect their assets after they are gone. The law offers several opportunities to make sure your family and loved ones are cared for and do not lose out on potential assets due to creditors and lawsuits. Some of these legal strategies include but are not necessarily limited to:

• Asset Protection Trusts
• Transfer-on-Death
• Beneficiary Designations

A trust is a legal arrangement in which you transfer ownership of money and property to another person while you are still alive. This person is called a trustee. The trustee becomes the legal owner of any assets you place into a trust. When the guarantor of the trust passes away, the trustee is then designated to distribute the assets in the trust according to the guarantor’s wishes. Because the assets in the trust legally belong to the trustee, they can be exempt from potential debt collection. Asset protection trusts are generally irrevocable. This means the assets you transfer into them cannot be transferred back out. This is why it is vital to ensure the trustee is someone reliable and that they will be responsible in distributing your assets.

Transfer-on-death documents are legal documents stating that, when a person dies, certain assets automatically transfer to the person named in the documents. This exempts the assets named in the transfer-on-death from the probate process and can also exempt those assets from potential debt collection.

Another key strategy is naming beneficiaries for specific assets. If assets are not explicitly assigned to a beneficiary in your will, they can enter probate. This is a legal process determining who will inherit unassigned assets. Creditors can claim assets that enter probate. If you name a specific beneficiary for assets, those assets will not enter probate. This can protect those assets from potential creditors.

These are only a few potential strategies available to protect your assets from creditors and lawsuits. If you think creditors may pursue your estate and want to protect your heirs from possible lawsuits and debt collection, it’s essential to consult an experienced attorney. A lawyer with experience in estate planning will be able to help make sure your assets are protected and will transfer to your heirs.

What Should I Do to Protect my Assets from Creditors and Debtors in California?

Everyone wants to ensure their family and loved ones are cared for once they’re gone. No one wants to leave the people most important to them behind with lawsuits and complex debt. This is why it’s essential to consult an attorney when estate planning. An experienced attorney can review your specific assets and help determine how to protect them from creditors and potential lawsuits. If you or a loved one are estate planning and want to protect your assets, don’t hesitate to contact the attorneys at Cava & Faulkner at 9070 Elk Grove Blvd, Elk Grove, CA 95624.

The attorneys of Cava and Faulkner are highly experienced in California estate planning law. They know multiple legal strategies to protect your assets and ensure your loved ones are cared for. They know no one wants to leave behind a legacy of debt and lawsuits. They understand the loss of a loved one is a difficult time and that no one wants to spend it dealing with bills and debts. Cava and Faulkner’s attorneys can help ensure all of your assets are protected and go to the people you want them to go to, not anonymous debt collectors.

Leaving behind financial responsibilities is an unpleasant thought. With the proper estate planning steps, you can ensure your loved ones are left with happy memories, not debt. If you or a loved one are estate planning and want to ensure your assets are protected from creditors and lawsuits, call the attorneys at Cava and Faulkner now at 916-831-7565 or email them for a free consultation.