The primary focus of your estate plan is likely creating a roadmap for passing down assets to loved ones at the end of your life, your estate plan should also help protect and grow those assets throughout your lifetime. In fact, asset protection should be an important component of your estate plan because failing to protect your assets could mean you have nothing left to pass down at the end of your life. The Los Angeles estate planning attorneys at Schomer Law Group, APC discuss some common asset protection strategies.
How to Protect Your Assets
Hopefully, you understand how important it is to include asset protection strategies and tools in your comprehensive estate plan. Because everyone has a different asset portfolio and different estate planning goals, only your asset protection attorney can help you decide which strategies and tools are right for your plan. In the meantime, however, it may help to better understand some common tools and strategies, including:
- Creating an estate plan. Your first line of defense when it comes to protecting your assets is to make sure you have an estate plan in place.
- Tax avoidance planning. Federal (and sometimes state level) gift and estate taxes can dramatically decrease the assets you ultimately pass down to loved ones unless you are aware of the tax and plan accordingly. Lifetime gifting is one way to reduce your taxable estate at the time of death, thereby reducing your estate’s exposure to estate taxes.
- Medicaid planning. LTC costs can be managed with Medicaid planning. Medicaid will help cover LTC costs; however, you must first qualify for benefits. To do that, you must keep non-exempt assets to a minimum. Often, that means establishing a Medicaid trust well ahead of the need to qualify for Medicaid benefits.
- Executing a pre-marital agreement. Executing a pre-marital agreement makes it clear who owns which assets in the event of a divorce or death without the need to consider the state’s marital or intestate succession property laws.
- Establishing the right type of trust. Trusts can help in several ways. An irrevocable living trust can shelter assets by taking legal ownership of the assets, thereby removing them from your estate and putting them out of reach of creditors. A trust can also protect assets from spendthrift beneficiaries by controlling how and when the assets are spent.
- Business succession planning. If you own an interest in a business, you need to protect that interest and plan how the value of that interest will be passed down or sold in the event of your death. Proper planning can also significantly diminish the risk of personal liability for business debts and liabilities.
- Properly titling assets. There are several ways to hold joint title in most states, including California. The method you choose will determine things such as what happens to your interest upon your death and whether your interest is at risk because of the debts of the co-owner.
- Updating your estate plan. To ensure that all your assets are protected, be sure to review your estate plan on a routine basis and update your plan when certain life events prompt an immediate update.
Contact Los Angeles Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about protecting your assets in your estate plan, contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.