In this day and age of foreclosures, high unemployment, divorces and large credit card debt, an inheritance can certainly help to ease the financial obstacles that many people are facing. But what will happen to your inheritance if you are deep in debt at the time you are to receive it?
If you already have an outstanding judgment against you that has not been paid and you are supposed to receive your inheritance outright and without any strings attached, then the judgment creditor can most likely step in and take your inheritance to satisfy its judgment. On the other hand, if you are to receive your inheritance through a lifetime trust instead of outright, then depending on the terms of the trust your inheritance may be protected for your benefit.
If you do not have any outstanding judgments against you but are still deep in debt when you receive your inheritance, then, depending on what you decide to do with your inheritance, a creditor could attempt to take your inheritance if you fail to pay your debt and the creditor gets a judgment against you in the future.
If you are in the process of receiving an inheritance or have already received it outright and without any strings attached, then regardless of whether or not you are deep in debt, you need to sit down with your own estate planning attorney in order to discuss all of your options for protecting your inheritance.
- What Are the Options for Paying Adult Beneficiaries Their Inheritance?
- Benefits of Creating Lifetime Trusts for Your Beneficiaries
- How to Protect Your Assets from Creditors and Lawsuits
- How to Protect Your Family from Creditors, Lawsuits and Divorcing Spouses
- 7 Tips for Finding an Estate Planning Attorney