When someone dies, their estate influences how everyone remembers them. All of their property must pass to others, and how they arrange that process can impact what people think of them years later. What they leave for the people they love and for charitable causes will become that person’s legacy.
Many people want to leave specific property for specific family members. They create an estate plan in the first place because they want to protect their loved ones from the stress of probate litigation and disputes. After all, families often fight when there are no clear instructions about someone’s wishes.
A legacy is about more than just posthumous gifts
Estate planning is also about someone’s comfort in their golden years, as living documents can name the person who might serve as the guardian if they experience incapacitation. Advanced planning also plays a key role in someone’s ability to qualify for Medicaid benefits.
The plan someone puts in place right before or in the early stages of retirement will determine what protections they can access and vulnerable they are as they continue to age. Asset protection planning is a very important step for those who want to protect themselves against debt collection efforts when they have already transitioned to living on a fixed income.
What is asset protection planning?
Asset protection planning involves identifying personal resources that could be vulnerable later in life and then acting to protect them against creditor claims or personal lawsuits. Often this process involves changing the ownership of those assets, sometimes by moving them into a trust.
Careful asset protection planning reduces the likelihood that creditors will be able to take someone to court because they have fallen behind on their bills and place a lien against their valuable property. Additionally, asset protection planning can continue protecting those valuable resources even after someone dies. They can avoid estate recovery efforts by Medicaid and creditor claims brought in probate court that could potentially diminish what their loved ones inherit from their estate.
Exploring the different processes often integrated into estate planning, including asset protection planning, can help people preserve as much of their property for their beneficiaries as possible.