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Asset Protection Is for Everyone, Not Just The Wealthy
Asset protection in the context of estate planning is often thought of as a process only for those that have a substantial estate to be protected from the government, creditors and/or predators. However, you do not need a mansion on the hill, millions of dollars in the bank or a limousine driver to need asset protection. In fact, many people think they do not have “assets” at all; however, if you have tangible “stuff” like a house, car, jewelry, etc. or intangible “stuff” like a bank account, retirement account, etc., then you have assets that likely need asset protection to keep them safe during your lifetime and keep them safe for your loved ones after your death.
- General Power of Attorney
One way to ensure that your assets stay protected is by not letting those you do not trust handle your assets. This can be done by creating a general durable power of attorney and naming only those that you fully trust as your agents. In case you are not able to handle your assets temporarily or permanently, whether due to an illness, a disease, or some other lifetime event, you can designate a person or people who can have access to your assets and the ability to direct what happens to those assets. If a power of attorney names an individual who does not handle assets well, it could lead to assets being sold, transferred, or lost to creditors.
- Trust Considerations
There are several different trust types, including revocable, irrevocable, special needs trusts and testamentary trusts, to consider when one is preparing your estate plan. Each trust has its own purpose and way of protecting your assets and therefore, discussion with an attorney on what option best fits you, your family and your needs is essential. While a trust can help with designating distributions after your death, it can also be created so that it protects your assets from creditors or allows you to qualify for certain benefits such as Medicaid during your lifetime. It can also be created so that your assets are protected from being used up during your lifetime, and then contain specific instructions as to how the assets are to be distributed upon your death. While more expensive than a will to create, lifetime trusts can be used right away to protect assets and avoid probate and related court costs and, if lifetime protection is not warranted, a testamentary trust can protect the assets you gave to your loved ones after your death.
- Business Succession
People often work their entire lifetime to create a business that they love. Whether it is a small family business or a larger entity, in order to protect it and its’ assets, a detailed succession plan is required to be in place. The plan will not only protect the assets, but it will also minimize tax liabilities, while ensuring continuous running of the business. To create a maximized asset protection plan, it is crucial to seek professional help from an attorney who is knowledgeable in the area.
Loosing someone close is hard enough and having to handle his or her assets can be a difficult process if no plan was ever set in place. So, no matter how big or small the asset value is, having an asset protection in place can protect you and your loved ones and provide all of you with mental peace of mind and financial protection.