A simplistic approach to estate planning is very common. Adults may worry primarily about naming a guardian to care for their children or providing clear instructions about the distribution of their property when they die. However, many older adults can benefit from a more comprehensive approach to estate planning.
Specifically, it is often beneficial for them to think about their golden years as they prepare for retirement, not just what will happen after they die. Thorough estate plans often include asset protection plans to maintain someone’s assets as they age and after they die. As such, the right asset protection strategies can benefit those on the cusp of retirement.
Acknowledge the risks
Most working professionals spend years setting aside money to fund their retirements. Budgeting plays an important role in financial stability during retirement, as people live on a fixed income. Retired adults need to know what assets they have and what expenses they must cover.
Unfortunately, as costs continue to rise, budgetary shortfalls are possible. Older adults might then face aggressive collection activity. Creditors, like hospitals, might take them to court to place a lien against their home. Asset protection plans help preserve key resources from creditor lawsuits. Those same strategies can help preserve resources from creditor claims after someone’s death. Even Medicaid might try to come after someone’s personal property or primary residence after they die.
Identify strategies that could help
Asset protection strategies only work when people plan before they run into legal issues. A large transfer to trust when creditors have already threatened to sue someone could trigger allegations of fraud in civil court. Therefore, those seeking to protect assets by transferring them to a trust or taking on a co-owner typically need to do so before they face aggressive collection efforts or creditor lawsuits. The creation of a trust to hold certain assets or the decision to transfer specific property to another owner can help protect those resources from collection efforts and lawsuits in the future.
The right strategy depends on someone’s current financial circumstances and the assets they hope to protect. Understanding that personal resources are vulnerable later in life and after someone dies may help people to establish effective estate plans that protect their comfort as they age and their legacy after they pass away. Seeking personalized legal guidance is a good way to get started.