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So Your Money is Tied Up in a Trust?  
Congratulations! Your assets may be protected, if down the road you meet with one of the creditors or predators of life. Your property may survive the encounter, to be there when you need it.
Let me give an example. One foggy morning after your spouse has passed away, you may have an accident. Suppose you hit a school bus. Suppose too, that a court determines that you were driving too fast, and so the accident was your fault.   A lot of the kids are hurt, even killed. 
Not all the insurance you could have will cover this. The plaintiffs – the children’s parents – would become creditors who could attach everything you own, your house, your bank account, everything.   You would be left completely broke.
Now suppose your spouse had left property to you in trust. The conditions of that trust were that you could get money out of the trust for your needs (broadly defined – you could basically do anything you could have done while your spouse was alive) but a creditor, like the school bus children’s parents, couldn’t get in. 
This wouldn’t mean that the parents would be out of luck. But your attorney would have a basis for saying “let’s settle this – let’s name an amount” rather than having the plaintiffs able to go after everything you have.
Let me suggest another scenario. After your spouse passes away, you meet “Beau” the tennis pro, or “Betty” the barmaid. You’re swept off your feet. A year or so later, you wake up and discover that this person is way too young and foolish for you, and they are only after your money. 
In a divorce, a court will generally look at the assets of both parties and divide them “equitably,” which may mean equally, if there is no clear reason to do so otherwise. Does “Beau” or “Betty” get away with half your assets? Not half of those that your first spouse left to you in trust, not if the trust is drafted properly.
Catastrophic creditors, divorce, bankruptcy – these are all things that can happen. A properly drafted trust will protect against all of them.
Notice that I said that your assets “may” be protected and I refer to a “properly drafted” trust. A trust is not a “one size fits all” item. It needs to be tailored to your particular needs and concerns. Not everything that is called a “trust” includes the protections that I have described. There may be reasons for leaving them out. 
What about estate taxes? If your estate (including your 401(k), IRAs and life insurance) amounts to a million or more, you will want to do some tax planning. But that’s another blog entry.