Different people create estate plans for very different reasons. If you have children, naming a guardian might be your biggest concern. If you own a business, naming your successor might be your main focus.
One reason people update or create an estate plan is to protect their personal assets from claims by creditors or plaintiffs in a possible future civil lawsuit. Has your estate plan integrated appropriate protections for your biggest assets?
There are numerous ways for people to protect their property
Asset protection planning is often an important part of the estate planning process. Testators identify assets that could be vulnerable to claims by creditors or even Medicaid. They then alter how they own or hold those assets to reduce the likelihood of anyone else taking action against their assets.
Moving a house into a trust, for example, would mean that Medicaid estate recovery would have a harder time coming after the house when you die. Changing how you own a business or hold a retirement fund could limit the possibility of a creditor or a plaintiff in a civil lawsuit successfully laying claim to that asset in the future.
Asset protection planning is not just for the super-wealthy
Some people think that only millionaires have to protect their assets, but anyone could be at risk of having claims against their personal property. If you cause a car crash and don’t have enough insurance, a person who gets hurt to try to come after your home equity. If you die with substantial medical debt, your creditors could consume your entire legacy and leave nothing for your children to inherit.
Thinking about what you want to leave for the people you love can help you decide what steps to take while planning your estate.