Property held in a revocable trust can be reached by creditors just like property held in your name. It has no legal effect on creditors, and protecting assets is not the purpose of a trust. The purpose of a trust is to pass your property to your chosen heirs in the manner which you choose without the need for court intervention or probate.

If you own a business and are looking for protection for your personal assets, the route to protection means incorporation as an LLC or a C-Corp (often with sub-chapter S election for tax purposes) and proper insurance coverage for the business.

If you don’t have a business but are concerned about asset protection, making sure you have good coverage for car and house insurance can be the key.

As far as debt collection protection is concerned, a trust is not a solution. It does many other things for you, but not asset protection.

DISCLAIMER: All legal principles quoted are valid as of the date of writing in the State of California. However, you should NEVER base your actions on a legal article, blog, or internet story, as facts in real life are complicated. You should have your case evaluated by an attorney experienced in the area of law needed for your case. In addition, there are often exceptions and potential changes to results that occur due to facts that you may think are trivial or unimportant. This article should not be taken in any way as legal advice on your specific legal matter.

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