Although the primary focus of your estate plan may be how your assets will be passed down to loved ones at the end of your life, your estate plan should also help protect and grow those assets throughout your lifetime. In fact, asset protection should be an important component of your estate plan because failing to protect your assets could mean you have nothing left to pass down at the end of your life. With that in mind, the Coral Gables asset protection planning attorneys at Stivers Law explain some common asset protection strategies.
Asset Protection Strategies for the Beginner
Hopefully, you understand how important it is to include asset protection strategies and tools in your comprehensive estate plan. Because everyone has a different asset portfolio and different estate planning goals, only your asset protection attorney can help you decide which strategies and tools are right for your plan. In the meantime, however, it may help to better understand some common tools and strategies, including:
- Tax avoidance planning. Federal (and sometimes state level) gift and estate taxes can dramatically decrease the assets you ultimately pass down to loved ones unless you are aware of the tax and plan accordingly. Lifetime gifting is one way to reduce your taxable estate at the time of death, thereby reducing your estate’s exposure to estate taxes.
- Medicaid planning. LTC costs can be managed with Medicaid planning. Medicaid will help cover LTC costs; however, you must first qualify for benefits. To do that, you must keep non-exempt assets to a minimum. Often, that means establishing a Medicaid trust well ahead of the need to qualify for Medicaid benefits.
- Executing a pre-marital agreement. Executing a pre-marital agreement makes it clear who owns which assets in the event of a divorce or death without the need to consider the state’s marital or intestate succession property laws.
- Establishing the right type of trust. Trusts can help in several ways. An irrevocable living trust can shelter assets by taking legal ownership of the assets, thereby removing them from your estate and putting them out of reach of creditors. A trust can also protect assets from spendthrift beneficiaries by controlling how and when the assets are spent.
- Business succession planning. If you own an interest in a business, you need to protect that interest and plan how the value of that interest will be passed down or sold in the event of your death. Proper planning can also significantly diminish the risk of personal liability for business debts and liabilities.
- Properly titling assets. There are several ways to hold joint title in most states, including California. The method you choose will determine things such as what happens to your interest upon your death and whether your interest is at risk because of the debts of the co-owner.
- Updating your estate plan. To ensure that all your assets are protected, be sure to review your estate plan on a routine basis and update your plan when certain life events prompt an immediate update.
Contact Coral Gables Asset Protection Planning Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about how to incorporate asset protection planning into your estate plan, contact the experienced Coral Gables asset protection planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.
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