How to Protect Bank Accounts From Lawsuits


Every year, more and more litigants file civil lawsuits in American courts. With the number of both legitimate and frivolous suits on the rise, you should consider taking steps to protect your assets – including checking or savings accounts. When evaluating the merits of a potential lawsuit, many lawyers now view the assets of possible defendants as one of the most important factors. You never know when you when you will be involved in a lawsuit; therefore, protect your bank accounts now before they are subject to forfeiture.

Download a template document for an irrevocable trust agreement (see Resources). This type of trust protects assets from seizure from creditors or third parties – even ones with judgments awarded in a lawsuit.

Visit a knowledgeable trust attorney and ask for a review of your agreement and to ensure it is valid and enforceable in your state. Alternatively, hire the attorney to draft the irrevocable trust agreement for you.

Designate someone to serve as trustee for the spendthrift trust. Select only someone you trust and who understands your financial goals and needs.

List yourself as the sole and primary beneficiary of the spendthrift trust if you are single and do not want others to have access to trust-controlled funds or assets. If you are married or have children, name your spouse or a child as the successor beneficiary in the event of your death. Naming a successor beneficiary at the time of the irrevocable trust’s creation provides additional protection for loved ones and helps to avoid unneeded probate costs and estate taxes.

Designate assets you want to protect from forfeiture or seizure from a third party. Ensure that you list all bank accounts. You may later add additional assets to an irrevocable spendthrift trust. However, to add those assets, you must first receive written permission from the trustee.

Execute the trust agreement in the presence of a certified Notary Public.

Visit the bank where you have accounts to include in the trust. Complete documentation to assign or transfer the accounts to the irrevocable trust. Also, ensure that you list the name of the trustee when assigning the accounts to an irrevocable trust.

Related Searches


Promoted By Zergnet


Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!