Bankruptcy and estate planning are not typically thought of as two types of law that go hand in hand, but if you are concerned about debt collection or asset protection, it is important to consider how your assets could be protected now, or in the future, through certain estate planning tools.
One such estate planning tool is an irrevocable trust. An irrevocable trust can be set up for your benefit or someone else, but the idea is that you are transferring your assets out of your control and allowing a third-party trustee to make distributions according to the terms of the trust. Once set up, as its name suggests, it is irrevocable. Its irrevocable nature is what provides asset protection. Once you no longer have access to the assets, neither do creditors.
While this might sound simple, the document itself must be worded properly to achieve your goals. You must also be comfortable transferring the assets out of your control to an independent trustee.
Another estate planning tool to consider for asset protection is a standalone retirement trust. This trust is different than the irrevocable trust in that it holds your retirement accounts for the benefit of the beneficiaries of the accounts.