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An ILIT is a tool specifically designed to own life insurance. Just like other trusts, the ILIT has a trustee, beneficiaries and precise terms for distributions. "You can add protective

provisions, like a spendthrift clause and a discretionary distribution clause, to keep the insurance proceeds from your beneficiaries' creditors," Gross says. A spendthrift clause

prohibits the trustee from transferring trust assets to anyone other than the beneficiaries. That includes an ex-spouse, creditors or even the IRS. "A spendthrift clause also says no

beneficiary is permitted to assign, pledge or sell any interest in the trust — whether trust principal or income," Gross adds. If the trustee believes the distribution would be wasted

or claimed by the beneficiaries' creditors, a discretionary distribution clause gives your trustee the right to withhold income and principal distributions that would otherwise be

payable to the beneficiaries. 4. TITLE BANK ACCOUNTS AND ASSETS PROPERLY If you own joint assets or name beneficiaries on your accounts and assets, a creditor cannot seize what you leave

behind after you die. Instead, the money will go directly to the person(s) listed on the accounts. But for the unsuspecting who haven't titled their assets properly, there are pitfalls.

SCENARIO: A 58-year-old married traveling salesman died of a sudden heart attack. There was an $80,000 bank account in his name alone that had to be probated. His wife later discovered a

$60,000 credit card balance, about which she knew nothing. It turns out the husband had a girlfriend on the side. After he died and the bank account went through probate, the wife was forced

to use those bank funds to pay off the credit card bills. HOW TO PREVENT THIS: Make sure the spouse is named as a beneficiary on the bank account, which keeps the asset from having to go

through probate. "If Dad dies and Mom is on the [bank] account, it's hers," Simasko says. Adding beneficiaries to financial accounts is another creditor-busting move, since

those assets avoid probate upon the death of the first account owner. But in this instance, it's the deceased person's creditors that won't get access to the money, not the

creditors of the beneficiaries. Instead of having a joint owner listed on the title of certain accounts, a variation on this technique is to have a named beneficiary listed on your accounts,

such as a 529 plan that may be for the benefit of a grandchild's college education. Another way to bypass probate and pass along the money to your heirs is to choose a payable-on-death

(POD) or transfer-on-death (TOD) account designation. This differs from a joint tenant or co-owner arrangement because your heirs only have access to the fund after your death. Joint tenant

and co-owners have access to the funds while you are alive. "You deserve the peace of mind in knowing that your life's economic work will be executed as specified, and your family

will be grateful to you for not leaving them with the headache of trying to sort out your estate," Abedeen says. _Lynnette Khalfani-Cox, The Money Coach(R), is a personal finance

expert, television and radio personality, and regular contributor to AARP. You can follow her on Twitter and on Facebook._