What Is Asset Protection?
Asset protection as it relates to estate planning is the means by which a person ensures that assets are kept safe for distribution to, and use by, beneficiaries after his death. There are many strategies for protecting assets, some of which are more effective than others. Much depends, as well, upon the specific situation of the grantor. It is a good idea to work with a Conroe estate planning attorney if you would like to develop an effective strategy for protecting your estate assets.
Concerns in Asset Protection
No one wants his estate to be eroded by estate taxes or delayed in probate court, but there are other considerations for asset protection as well. If you have heirs to whom you would like your estate to be passed after you die, some of your concerns may include:
- Making sure that heirs manage the money properly. You may have a son or daughter who is not strong at financial management. You can plan your estate accordingly by having assets distributed monthly or periodically.
- Keeping a later spouse from receiving assets meant for others. If you are widowed/divorced and remarry, it is important that you make provisions for whom will receive your assets after you die. This is often a consideration in asset protection planning, for the second spouse may already be well provided for.
- Avoiding losing assets through bankruptcy or lawsuit. You can place assets safely away from bankruptcy courts and legal disputes.
Tools for Asset Protection Planning
There are many options available for protecting assets, such as family limited partnerships and life insurance policies. Among the best tools available are trusts. There are many types of trusts, and you need to determine which is best suited to your needs. For instance, if you are concerned about your estate value in avoiding taxation, and would like a portion of your estate left to charity, you may consider a charitable remainder trust. If, on the other hand, you would like your assets kept away from probate and also control distribution, you may consider an irrevocable trust. You may also wish to set up a living trust, which allows for use of assets while you are alive and provide for your needs if you become incapacitated.