Legal Question in Wills and Trusts in California

If I put my 401(k) and other assets into a Trust.....can they be "attached" or "invaded" to pay outstanding medical bills? I lost my job a year ago, then had a massive heart attack (without insurance) and am now facing what will probably be very large bills. I'm too young for Medi-Cal, Social Security and I'm single with no dependents. I have a 401(k). If I put that into a trust, is it safe from creditors? If not in a trust, can I put it into another person's name like my sister, and have myself as beneficiary? I've worked 35 years to build that savings and I don't want to lose it just because I'm not some illegal alien that gets all the freebies they want. (sorry for the rant).


Asked on 11/29/11, 10:00 am

2 Answers from Attorneys
Scott Jordan Jordan Law Office

Your 401k is safe so long as it remains with your plan administrator. It does not need to be moved to a trust, especially since that would mean a change in owner which has severe tax consequences.

I suggest you contact an Estate Planning attorney in your area to discuss more in depth. You can also call my office and I would be happy to explain your options a little more thoroughly.

Good luck!

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Answered on 11/29/11, 10:37 am
Rosemary Meagher-Leonard Law Office of Rosemary Meagher-Leonard

You should leave your 401k where it is because, as Mr. Jordan has said, there can be severe tax problems if you do move it to your trust. Your 401k cannot be attached to pay for your medical bills if it continues to be managed by its current plan administrator.

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Answered on 11/29/11, 12:04 pm


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