Q: I have a judgement against me to the tune of around $13,000. My husband and I both have a will.
If my husband dies before me, will the judgement become due after the transfer of assets to me? Also, will a irrevocable trust be advisable to keep all creditors and judgement at bay? I am the one with a judgement. My husband would do the trust by himself with me as beneficiary, hopefully to avoid probate and judgements against me. Will that work?
A:
The judgment is due now. The judgment may grow dormant or become unenforceable over time if the judgment creditor does not keep it alive by taking certain steps, such as, for example, issuing an execution or garnishment every so often. Joint bank accounts with your husband may be vulnerable now to collection remedies, depending on your state's laws.
As for asset protection planning, transferring your own assets to a family member or your own trust or your husband's trust with knowledge of your own creditors and debts might be considered what's called a "fraudulent conveyance." If so, the creditor could probably claw back those assets to apply to the debt. It's more complicated than this but you would need an asset protection lawyer to advise you.
As for the effect of your husband's death on the judgment: property distributed to you would become vulnerable to collection remedies such as execution, garnishment, and others by your creditors. Jointly owned assets that would become your sole assets would also be vulnerable.
Contact an attorney in your state for specific legal advice about your situation.
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