When planning for the future, most people think about how to pass down wealth to their children or loved ones. But there’s another equally important consideration: how to protect your heirs and what you leave behind from outside threats like creditors, divorce settlements, and lawsuits.

At Pettis Webber Pacific, we help Washington families create estate plans that not only transfer wealth—but preserve it. One of the most effective tools for long-term protection is a trust.

The Problem: Inheritance Isn’t Always Safe

Once an inheritance passes directly to a beneficiary, it becomes their asset. That means it can be:

• Divided in a divorce settlement
• Seized by creditors to satisfy debts
• Targeted in a lawsuit
• Spent quickly without guidance or limits
• Disqualify the beneficiary from disability benefits and programs

Even well-intentioned heirs can lose significant portions of an inheritance due to circumstances beyond their control.

The Solution: Strategic Use of Trusts

A well-drafted trust can provide a legal shield for the assets you leave behind. Rather than distributing everything outright, a trust allows you to control how and when assets are used—and protect them along the way.

Here are three powerful ways a trust can protect your heirs:

1. Shielding Inheritances from Creditors

If a beneficiary is facing debt, a judgment, or bankruptcy, any money they inherit outright may be claimed by creditors. A trust keeps those assets under the control of the trustee (the person or entity you appoint to manage the trust), rather than the beneficiary.

As long as the trust doesn’t require distributions directly to the beneficiary and gives the trustee discretion, the assets are generally not subject to creditors’ claims.

2. Divorce-Proofing an Inheritance

In Washington, inherited assets are typically considered separate property—but things can get complicated fast. If inherited funds are comingled with marital assets or used to buy shared property, they can lose their protected status.

A properly structured trust keeps inherited assets separate and managed according to your rules. The trust can direct that funds be used only for the beneficiary’s individual needs, not marital expenses, reducing the risk they’ll be divided in divorce proceedings.

3. Protecting Against Lawsuits and Poor Decisions

Lawsuits can happen to anyone—a car accident, a failed business, or even a liability claim. If your beneficiary receives their inheritance outright, that money is fair game.

A trust keeps control with the trustee, who can make distributions only when appropriate. This also protects beneficiaries who may be inexperienced, vulnerable to financial abuse, or simply not ready to manage a large inheritance on their own.

Types of Trusts for Asset Protection

• Discretionary Trusts: Give the trustee full control over when and how to make distributions.
• Spendthrift Trusts: Include clauses that prevent creditors from accessing funds held in the trust.
• Lifetime Trusts: Hold assets for the beneficiary’s lifetime instead of distributing everything at once.
• Beneficiary-Controlled Trusts: Allow a responsible heir to serve as co-trustee or successor trustee while maintaining asset protection.
• Special Needs Trusts:  Allow for the beneficiary to keep their eligibility for needs-based disability and public benefits, and benefit from the gift that you give them.

What About Revocable vs. Irrevocable Trusts?

Revocable living trusts are excellent for avoiding probate and organizing your estate—but they do not offer asset protection during your lifetime. For long-term protection, irrevocable or specially drafted sub-trusts within your estate plan may be necessary. Our team can help you determine the best structure based on your goals.

Planning Ahead = Peace of Mind

Your estate plan should do more than transfer wealth—it should protect the people you love from unnecessary risk. Trust-based planning offers flexibility, privacy, and powerful legal protections that a simple will cannot.

At Pettis Webber Pacific, we specialize in designing trusts that safeguard your legacy while giving your heirs and beneficiaries guidance, support, and stability.

Ready to learn how a trust can protect your family? Click here to schedule a consultation with our team today.