You’ve worked hard to build financial security for yourself and your loved ones. And it is probably frustrating to think that protection could be lost.
However, there is a way to protect your assets from creditors, lawsuits and other risks.
Asset protection as part of your estate plan
Your estate plan should include various strategies to ensure that your assets will be preserved for future generations. One common method is to use trusts, which are legal entities that hold assets for the benefit of another person or entity.
In other words, the ownership of the assets is transferred from you to the trust. The trust administrator then manages the trust on behalf of your beneficiary. Therefore, if you’re sued or have creditors come after you, they won’t be able to access the assets held in the trust.
It’s also important to consider the type of trust you set up. For example, an irrevocable trust allows for more asset protection than a revocable one because it can’t be changed or revoked once set up.
Another common worry is paying for long-term care. With an average monthly cost of $10,000, staying in a skilled nursing facility can quickly deplete your savings. Placing all your assets in a trust will ensure they are not considered when applying for Medicaid, as long as it’s done before the 5-year look-back period.
When planning asset protection strategies, working with someone who understands the complexities of estate planning and trusts is essential. They can help ensure that your plan is set up correctly to provide maximum protection for your assets and ensure that your hard-earned money stays safe for years.