Asset Protection Planning: Should It Be Part of Your Estate Plan?

Asset Protection Planning: Should It Be Part of Your Estate Plan?

Asset protection is part of financial planning that helps you protect your assets from creditors and others. By planning correctly, you can shield some or all of your assets from creditor claims both while you are living and after your death as part of your estate plan.

In most cases, asset protection planning should be part of your estate plan, but it is sometimes overlooked.

Asset Protection for You in Your Estate Plan

This type of planning can be complex because you need to consider specific laws that protect creditors from purposeful evasion. However, there is a difference between evasion and planning that your attorney can help you see and accomplish. In general, if there is a business, investment, or tax reason for the action, it is far less likely to be set aside as an attempt to evade your creditors.

Asset protection planning for you often requires long-term planning, but it certainly can be accomplished in most situations. The most common form of asset protection planning for individuals in their estate plan is taking steps to avoid excessive estate tax by decreasing your taxable estate before you pass.

Asset Protection for Your Heirs

You may also need to consider whether your heirs will have to deal with creditor claims when they receive funds or property from your estate. If you want to be sure that assets get into your loved one’s hands, rather than their creditors, there are steps you can take to alter your will to avoid creditor claims.

One of the most common examples is to create a testamentary trust that uses a trustee you trust to distribute the funds or assets in a certain way. Your loved one is the beneficiary, but they do not have complete control over the funds or the assets. Because of this lack of control, their creditors cannot reach the funds.

Insurance as Asset Protection

Insurance should be part of your asset protection plan if you are concerned about dealing with your own creditors. If you have to defend against claims or have health-related issues, insurance can be a financial lifesaver. Life, health, disability, homeowners, and auto insurance should all be part of your larger financial picture.

If you are concerned about protecting your assets both now and long after you pass, get help to create that plan in a legal and carefully constructed way. The team at the Law Office of Charles D. Stark is available to help. Call today to schedule an appointment: 707-527-9900.


Contact Us

Sorry. This form is no longer accepting new submissions.