You’ve worked hard all your life to provide for your family and ensure that they will be well-off. Thinking about important milestones such as your daughter’s wedding or watching your grandson tackle his first year in medical school makes you grin from ear to ear. However, prosperous economic times may not be guaranteed forever. With an integrated Atlanta’s estate and asset protection planning, you are able to cut your financial risk, protect your assets, and prioritize your loved ones. Here is some insight about protecting your assets with an estate plan.

Common Scenarios That Require an Estate Plan for Asset Protection

Planning for the unexpected without the legal expertise of an attorney is a daunting task, and the results of such efforts are nearly always hit or miss. Bankruptcy, divorce, judgements, and death are some of the top life events that you’ll consider when discussing estate planning and asset protection with your attorney.

It is very difficult to be immune to the devastating consequences of bankruptcy. A few setbacks, such as a prolonged illness, job loss, or legal troubles, can drain your savings and prevent you from paying your bills on time. Sometimes bankruptcy is the only solution. When you experience bankruptcy, you allow the court and your creditors to inventory and seize certain assets for debt repayment. For example, it is common to lose a family home or land that was meant to be passed down to children after the death of a parent.

As for divorce, they are painful enough without the added stress of losing assets that you’ve spent many years working towards earning. In this scenario, you’re a widow. Your deceased husband’s business, work ethic, and careful financial planning left you and your three children very well off. You still run the family business and are now remarried. However, after some years of struggling, your marriage ends. In the divorce, your husband takes half of your assets. You and your late husband had planned to give some of your property and cash to your children when they reached a certain age. The question is, will you lose your children’s inheritance?

Even responsible business owners have to worry about lawsuits. Asking the wrong question during an interview or doing a pre-employment credit check on a new hire without their written consent can both result in potential legal trouble for your business. Legal battles also come from customers who may feel that they have been wronged by your business. For instance, cyber criminals can hack your databases and expose sensitive customer data. Failure to keep customers’ personal and financial data safe can result in litigation, especially now in the digital age that we live in. When events like these happen, you risk losing personal assets, such as your home and your car, if you don’t have the right asset protection plan in place.

Death is always a time grief for the loved ones of those who have passed. However, some families mourn more than others when they must deal with financial woes on top of the loss of a family member. 

Asset Protection Tactics

Various types of trusts and business structures are used to shield your assets against loss now and in the future. If you want to protect assets such as cash, real estate, and personal effects against loss during a bankruptcy, you’ll need an asset protection trust. When you put your items into a trust, you no longer legally own the assets; they belong to the trust. You choose a trustee to make sure that the trust is administered properly. Creditors can’t seize trust-related assets.

In the described divorce scenario, the widow’s late husband partnered with an estate planning attorney to put assets in trust for his wife and three children. The widow’s new husband could not make off with her home and her children’s inheritance because her late husband placed the family’s assets into discretionary trusts for his wife and children before his death. The trustee decides when and how assets are distributed to beneficiaries. Discretionary trusts are flexible, and you can direct trustees to release part of the trust assets to any beneficiary.

For business owners, protecting assets involves getting the right insurance and structure for your company. Structuring your business as a limited liability company (LLC) separates your personal and business assets. If an employee or customer sues your LLC, they can’t take your personal assets.

Who Benefits Most From an Estate Plan That Includes Asset Protection?

While many people believe that only the very wealthy need estate planning services, most Americans can benefit from a comprehensive estate plan that includes asset protection. Besides shielding your family’s real estate and cash holdings during lawsuits, asset protection trusts give you more control over how and when your assets are used. You can craft a trust that distributes a child’s inheritance when they need it most. These trusts also allow your beneficiaries to use the assets while minimizing associated taxes, and your loved ones don’t have to go through drawn-out probate proceedings to access holdings.

When Is the Right Time to Create an Asset Protection Estate Plan?

If you’d like the asset protection that effective estate planning brings, then contact a lawyer who specializes in estate planning. Many asset protection trusts must be put in place years before something unfortunate, like a bankruptcy or divorce, occurs. Every situation is different. The right lawyer will evaluate your needs and generate a custom estate plan that fits your family’s short and long-term goals. If you have an estate plan already, you’ll want to go over your plan’s terms with your lawyer periodically to make sure that your estate plan still fits your needs.

Final Words

By using the right mix of legal tools for estate planning you can enjoy every minute with your loved ones without worrying about their future.

Author Info

Blake Harris is the Managing Attorney at Mile High Estate Planning where he assists clients with Wills and Trusts, Asset Protection, and Probate.

Blake has extensive knowledge and experience helping families plan for and manage the transfer of their assets.