Much of estate planning is about finding ways to protect your assets for yourself and for future generations. However, asset protection goes beyond planning for death. Asset protection also is used to protect your assets at the present moment. Asset protection a proactive step that you take in advance of a potential lawsuit or claim from a creditor so that a creditor or plaintiff cannot attempt to take property away from you.
Asset protection is a proactive, strategic measure that can use a combination of trusts and entities to ensure that your assets are creditor protected all the while ensuring that you meet your business and tax objectives.
Your estate planning attorney can help you integrate all of your goals to ensure that your assets are protected in a comprehensive manner.
Estate planning is a broad term that covers numerous aspects of planning for the end of a person’s life and the aftermath of their life. One of the most familiar components of estate planning is a last will and testament.
In a will, the decedent is able to articulate their wishes for how their assets will be distributed after they pass. This document can ensure that debts are covered, establish a trust, distribute property, name a guardian for a minor child and much more.
However, a comprehensive estate plan consists of more than a will. Estate planning is all about protecting your assets so that they do not get depleted by probate or claims from creditors.
Estate planning does not take place after death. Rather, it is critical that this important step be taken whenever an individual has assets that they want to protect and a family to care for.
A comprehensive estate plan may include plans for medical care if the individual becomes incapacitated on a temporary or long-term basis.
Typically, this is accomplished by a power of attorney, in which someone is appointed to make decisions for you should you become unable to do so.
With a power of attorney in place, there is no need for the court to appoint a conservator or guardian, and this means that it is possible to avoid having to set up a guardianship.
Similarly, a health care proxy empowers a person of your choosing to make critical medical decisions on your behalf if you ever are unable to do so.
When you set up a trust, it’s as if you are putting certain assets into a special container. These assets may be held for your benefit or for the benefit of other people or organizations that you designate.
Trusts can be highly customizable, allowing you to establish terms that make sense for you, your assets, and your beneficiaries.
Revocable trusts frequently are used in estate planning and asset protection because they help you to manage your assets during your lifetime while also helping the beneficiaries to avoid probate after your death. This type of trust also may make it possible to reduce or avoid certain taxes.
Medicaid trusts similarly may be used to protect your assets from being unduly depleted by nursing home care. Some people also decide to set up a charitable trust that gives a portion or all of its assets to your chosen charity, which effectively lowers the tax liability on your estate.
Finally, if you have a dependent with special needs, you may want to create a special needs trust, which allows the beneficiary to collect an inheritance without harming their eligibility for SSDI benefits from the government.
Establishing one or more trusts is sensible for many individuals, even those who would never consider themselves wealthy. This is because trusts protect your assets from being depleted by beneficiaries, creditors, and expenses of administration in the event of probate.
Moreover, a trust helps to ensure that your heirs and their children will continue to benefit from the assets that you amassed during your lifetime.
Asset protection is not just for the wealthy or for those who are worried about creditors. In fact, asset protection is a tool that anyone can use to protect their wealth from life’s inevitable uncertainties.
Asset protection planning has many advantages such as:
At Easy Estate Probate, we have made estate planning and asset protection accessible to everyone. Whether your wealth is modest or you are a high net worth individual, we have the experience and knowledge that is required to help you hold onto your assets for your benefit and for the benefit of your heirs.
Asset protection plans are different for everyone depending on their needs. We help people create comprehensive financial and estate plans for the future and also address their needs today.
Keep in mind that asset protection plans cannot help you if you are already named in a lawsuit. That is why it is crucial to act now.