Estate planning is an important means by which to protect your assets. There are several features of it. Some involve protecting your current wealth while others focus more on protecting the assets your heirs are to inherit. You should start planning now to defend your fortune. Hiring an estate planning lawyer will help you get through the process. Here are a few of the plans and protections you should put into place to preserve all that you have worked for.
Asset Protection
You may have a sound and extensive insurance policy. You may have designed your policy so that your insurer is compelled to bail you out if you are ever held liable for the injury or death of another. The fact of the matter is that even the most generous insurance policies have limits. And if claims are made against you that exceed those limits, the litigants will come after your assets. Your personal wealth can also be targeted by creditors. If you are involved in business ventures and the companies you have started to fail, it is possible for investors to hold you financially liable.
If a lawsuit forces you into court, there is a chance that the decision of the jury will go against you. While some of your assets may be off limits, there will probably be a large portion of your personal wealth that will be subject to seizure if the plaintiffs win. The only way to stop this from happening is to build the highest and most robust legal fence possible around your assets. There are certain legal tools that can be used to do this.
Establishing a strong asset protection plan will keep your wealth out of the hands of creditors and potential litigants.
The Importance of Wills
You may not want to speak about your death, but you will need to plan for it. The only way of guaranteeing that your property and assets are divided according to your wishes is to create a will. Otherwise, your estate will be declared intestate and your family will need to spend resources and time in probate court sorting it all out. This kind of thing can lead to the most bitter divisions in a family, and it can give judges the power to decide how your estate is to be distributed.
If you have spent your life building a company, you will want to leave it in the hands of people you have mentored and trust. Your will can reflect this desire. You will be able to leave operational control of your company to those you have chosen to succeed you; at the same time, you can ensure that your family benefits from the financial prosperity of the company.
If you own multiple properties, you can leave each of them to the person of your choice. Your will can also designate the people you want to receive family heirlooms and other precious things of value that are in your keeping.
You can also create a living will. These kinds of wills are mostly about health care directives. Even if you are relatively young and healthy, you should still create a living will. You never know when an accident or serious injury may strike. If you are left incapacitated after such an incident, you can state the treatment that you want in your will. Or, you can give a friend or family member that you trust the power to make such decisions.
The Value of Trusts
Trusts are legal instruments that are designed to minimize the administrative and tax burden associated with the distribution of money. You, as the person with the money, are the trustor. To establish a trust, you must appoint a trustee, who is responsible for the management and oversight of the money, and a beneficiary, who will receive it.
You can create trusts to help loved ones through school and to give them a solid start in life. As the trustor, you can set certain conditions for the pay out of the trust. You must choose your trustees with great care. They are legally obligated to manage the fund and ensure that all conditions are met before the beneficiary receives money.
You can also establish a trust for your own benefit. If you fall ill or must relocate to long-term elder care facility, you may be permitted to avoid burdening your family with the expense.
Planning for Old Age and Incapacity
As you grow old, you will need to consider who you want to manage your personal finances and healthcare. There may come a point at which you become too ill to look after yourself. An estate planning lawyer can help you develop a financial power of attorney. This document stipulates the person you want to manage your finances, pay bills, make investments, and carry out other tasks on your behalf.
You can also create a medical power of attorney. This document empowers one person to make medical decisions for you should you lose the cognitive ability to do so. This is an important document. Your sudden or gradual incapacitation can send your family and your business into chaos. If you are ever in this situation, you want someone who will make decisions in accordance with your wishes, not their own gain.