Whether you are creating your first estate plan to protect your young family, or you are thinking about retiring and need to review your existing plan, you may need to incorporate asset protection into your estate planning. Asset protection planning allows you to take measures to protect your assets from the most common risks that many people experience. Keep reading to discover the different risks to your assets that you should be aware of, and several strategies that can be used to minimize those risks.
Threats to Your Assets
If you don’t properly protect the assets that you’ve worked so long and hard to accumulate, they can be lost very quickly for any of the following reasons:
- Creditors – When personal creditors come calling, your personal assets are obviously at risk. But, for many small business owners (particularly sole proprietors), business debts and obligations are also a threat to your personal assets. Failure to set up your business as an entity separate and apart from “you” leaves your personal assets (your home, bank accounts, and investments) in danger.
- Lawsuits – You may think doctors, corporate executives and those in other risky professions are the only ones who need to worry about protecting their assets from lawsuits. Think again. There are many common circumstances under which your assets can be attached or garnished. Most people don’t even think about these circumstances until it’s too late. For example, if your teenager is involved in a car accident, or if your tenant slips and falls on the stairs in your rental property, you could end up on the wrong end of a lawsuit.
- Divorce – Of course, your divorce can have a big impact on your assets. However, if your children get divorced, that can also have a big impact on the assets they inherit from you. Leaving assets to your children outright means those assets could be considered as marital assets, subject to division in a divorce. Think about one-half your child’s inheritance walking out the door with their ex-spouse. Not a pretty picture, is it?
- Long Term Care – Perhaps the biggest risk to your assets is if you or your spouse require long-term medical or nursing home care. In Massachusetts, the average cost of nursing home care is over $10,000 per month ($120,000 per year). These costs can wipe out a lifetime of savings quickly.
Options for Asset Protection Planning
When you come in to meet with us about asset protection planning, we will review your unique situation and determine the right solutions for you. There are many options to limit your personal liability, including establishing a limited liability company (LLC) or other business entity, and creating a wide range of legal trusts to protect assets. Just like estate planning in general, asset protection planning can be tailored to your specific needs. Our team can help you determine what is right for you.
Get the Help You Need
You can (and should) include asset protection planning in your overall estate plan right from the start. Whether you are creating your first estate plan, or you are considering retirement and needing to review an existing plan, our team can help protect what you have worked so hard to achieve. Contact us today to schedule your consultation.