December 22, 2021 | Asset Preservation Planning
If you follow our blog, you understand why you need an estate plan and how it can provide peace of mind for your loved ones when you’re gone. But what about your own peace of mind? How can you be sure your assets are protected against threats to your estate while you’re alive? That’s where asset protection attorneys come in.
Estate Planning vs. Asset Protection
In estate planning, we’re focused on creating wills, trusts, powers of attorney, and other documents associated with end-of-life planning. These legal documents outline who has legal authority to make decisions on your behalf in the event you become incapacitated, what should happen to your assets and property upon death, and who should be the executor of your estate. These documents are all important, but they don’t address how to protect your assets during your lifetime. For that, you’ll need an asset protection attorney.
An asset protection attorney looks at areas where you may be exposed to liability and utilizes legal tools to protect you. When people think of liability, property damage and personal injury are what usually comes to mind. Certainly, you need to be protected against these, but there’s also a major liability many retirees don’t plan for: long-term care.
The Risk of Long-Term Care
As we mentioned in a previous blog post, out-of-pocket medical expenses incurred in the five years prior to death leave one in four seniors bankrupt. That includes long-term care costs. Despite the risk, many retirees remain unprotected.
That’s why you need an asset protection attorney. Like estate planning attorneys, asset protection attorneys utilize trusts, but they use them to shield your assets from creditors, including nursing homes.
Why is this so important? Because we simply don’t know what the future holds. We don’t know whether you’ll need long-term care, or for how long. Without an asset protection trust, if your long-term care costs exceed your assets, you could lose your home. For many families that’s a devastating possibility.
The Importance of Planning Ahead
An asset protection trust could prevent this situation, but it requires forethought. That’s why talking with an asset protection attorney early on is so important. Asset protection trusts require assets to be held in trust for at least five years to be fully protected. Other options are available if you’re in a situation where your assets are currently at risk. But if you have the luxury of time, being proactive is the best approach.
At AlerStallings, we understand that estate planning and asset protection shouldn’t exist in silos; they go hand in hand. That’s why we take an integrated approach that makes it easier for you and your family to get the protection you need with just one call. Schedule a 15-minute, no-cost, no-obligation consultation with one of our attorneys to learn more.