Thinking about death is unpleasant. No one wants to consider what it’s like when life ends and how loved ones will cope with the loss. However, estate planning is essential to providing for your family’s future.
Safeguarding your assets is one of the best things you can do for the people you leave behind when you pass away. Using the most effective safeguarding methods can ensure the seamless distribution of property to your beneficiaries and prevent creditors from pursuing claims against your estate.
Below are the strategies you should consider to protect your assets.
You can shield your assets from lawsuits, bankruptcy, the government, and divorce by creating an irrevocable trust. You can transfer the assets you want to protect into the trust to keep there until you die. The assets belong to the trust then, and you have no more ownership of those assets. To ensure the transfer of the assets to the appropriate people upon your death without needing to go through probate, you must name them as beneficiaries.
If you’re a freelance worker, small business owner, or landlord, someone might hold you personally liable for a business-related problem. Setting up a corporation or an LLC could shield your personal assets from a lawsuit.
Structuring your business in these ways prevents others from going after your personal assets if your business causes them injury or they sue you for unpaid debt. They can only file a claim for your business assets, so your personal assets go untouched.
You should consider setting a high limit on your personal liability insurance if you expect to receive a significant inheritance or financial obligation. The limit on your liability insurance should match your net worth at a minimum. However, consulting an asset protection attorney can help determine your financial situation and the amount of liability insurance that works best for you.
You might have money in a joint account with your spouse or child. However, the person or people named on the account own half of the money and can use it how they want. They might also receive an automatic transfer of funds left in the account when you pass away without going through probate.
That could be undesirable if you intended to have joint ownership of the funds for only a short period. Consider carefully whether you want the person with whom you share ownership to become the owner of the entire account upon your death.
There is no such thing as planning for the future too early. You should create an estate plan to protect your assets and give your family financial stability when you’re gone.
The Law Offices of Stephanie Hon are ready to help you determine the asset protection strategy that suits your needs. Call us at (512) 888-9378 for your free 15-minute call with an estate planning lawyer in Cedar Park, TX, to learn more.