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When it comes time to plan your estate, it is more than just drafting a will or deciding who gets your personal belongings. You need a strategy to manage your assets and ensure a smooth transition after you pass away. However, one aspect is often overlooked: asset protection. Let’s look at the importance of asset protection and how that can help with your estate planning.
What Is Asset Protection?
Whether you own a small or large estate, you will want to think about asset protection. This strategy protects your wealth and property from risks. Sometimes, creditors, legal claims, and other unforeseeable events could jeopardize your assets.
What assets do you need to protect? Basically, if you own anything of value, you will want to consider protecting it. However, most people have high-value assets, and protection becomes imperative in these cases. Let’s look at a few examples.
Real Estate
Whether you own the family house or have a portfolio of rental properties, consider choosing an ownership structure to keep them protected. Setting up a trust or a limited liability corporation can limit personal liabilities and shield against ownership disputes.
Investments and Retirement Accounts
Many people have a portfolio of investments that include 401(k)s and IRAs. When you diversify your investments, you can protect against unnecessary risks. Some retirement accounts offer limited creditor protection, which can help safeguard your assets.
Art, Collectibles, and Valuables
Some individuals also have valuable personal collections, including art, fine jewelry, vehicles, and other assets. Insurance plans can protect these items, but you always want to stipulate in your estate plan how to dispute these values after your death.
How to Protect Your Assets
Asset protection is not about hiding assets. Instead, it preserves them for your benefit and your loved ones. While every situation is unique, you do have a few options.
With revocable or irrevocable living trusts, you can manage all your assets throughout your lifetime. These options provide policy by avoiding probate. Along with that, it can shield assets from some creditor disputes. However, they are not always the best option for every situation.
Revocable trusts can be changed at any time, while irrevocable ones cannot be changed after they have been established.
If you want to transfer assets to family members while still remaining in control, then a family limited partnership might be the answer. These partnerships offer asset protection against lawsuits. Also, they can provide a few tax advantages.
Anyone who owns business assets should make sure to have a succession plan in place. With that, you can ensure that the company will continue operating even if you have passed away.
Additionally, you may want a limited liability corporation or partnership in place. If there are creditor claims, that business entity can shield business assets from potential claims.
Collaborate with Professionals
While these are general tips, your situation may vary. If you want to know the best options for your family and assets, make sure to contact an asset protection lawyer. They have the experience to create an estate plan offering asset protection. With their help, you can have peace of mind that your assets will pass to the right beneficiary and not remain in a legal dispute with creditors.
Remember that asset protection isn’t a one-size-fits-all solution. An estate planning attorney can help you find the right fit for your needs.
Learn More About Asset Protection
Asset protection ensures that your valuables, investments, and other assets are protected from credit claims, lawsuits, and other matters. To determine the best option, schedule a meeting with Bielski Chapman, LTD.
Whether you wish to create an estate plan or just want to know more about protection options, we can help you get on the right path. Please contact our office at (312) 583-9430 to schedule a complimentary 15-minute consultation.