It may seem like a grim subject but preparing for what happens after you pass away is crucial to protecting your legacy and your family. No matter how little or grand your assets are, the fact is you’ve worked a lifetime to accumulate what you have and it’s important protection it for those you love. There are many people who believe that setting up a will is enough, but unfortunately, this is just not true. It’s important to know which estate planning strategies can keep your assets safe from taxes and creditors, thus securing your family’s future.
What is Asset Protection?
Asset protection is about creating strategies to guard your wealth and assets against taxation, seizure, and other losses. While asset protection cannot protect you from having to pay any existing obligations or creditors, it helps to protect it for the future from:
- Long-term care costs
- Lawsuits
- Marriage
- Divorce
- Poor decision making
Hiring an Arizona estate planner is a great way to ensure that your assets are protected so that your family is secure after you pass away. It allows you to manage and control your assets while you’re alive. It gives you the freedom to change who will receive or benefit from them, all while protecting them from future creditors and predators.
Estate Planning
When people think of end-of-life preparations, they may think that having a will put in place is enough— but that’s not the case. A will is certainly important, but it isn’t enough. Estate planning is a necessity when you are planning on how you will protect your family and assets after you’ve passed away.
Estate planning goes further than a will does, covering items such as:
- Asset Protection
- Estate Taxation
- Unique Asset Succession
- Guardianship of Minor Children
- Divorce Protection
- Medicaid Triggers
It may seem like a complicated and convoluted legal process, but proper estate planning can make it simple and straightforward. It’s common for people to put off estate planning, but those who have done it find a sense of relief afterward. There is no longer concern about what will happen if you become incapacitated or pass away unexpectedly.
AB Trust for Asset Protection
While planning your estate, there are a few types of asset protection options to choose from. One of those options is creating an AB trust.
An AB trust is an estate planning tool for married couples. An experienced estate planning attorney can assist in creating this type of trust and ensuring that everything is arranged properly. It can be set up under a couple’s Last Will and Testaments or their Revocable Living Trusts. These trusts were first created to reduce federal estate tax.
This type of trust works when one spouse passes away. The assets from the deceased spouse will be funded into his or her trust. This is commonly known as the below-ground or B trust. The surviving spouse’s share of the assets is then funded to what is known as the above-ground or A trust.
When a B trust is properly created, it offers a variety of protections against creditor claims, estate taxes, claims from any new spouses or their children, or nursing home expenses. Since the deceased spouse’s share of the assets passes through an irrevocable trust it is never owned by the surviving spouse. This allows the assets to avoid estate tax.
Other Types of Asset Protection
There are more asset protection options available depending on your needs. There is a wide assortment of different trusts that can be used to keep your assets safe from creditors and predators, including:
- Irrevocable Life Insurance Trusts
- Family Limited Partnerships
- Family Protection Trusts
- Special Needs Trusts
- Charitable Remainder Trusts
- Qualified Personal Residence Trusts
- Grandchildren Trusts
Asset Protection from Morris Hall, PLLC
Morris Hall has offered quality estate planning services for our clients for over five decades. Our team is knowledgeable and experienced in helping you to protect your assets and secure your family’s future after your death. We offer the professional resources you need to guide you through asset protection and comprehensive estate planning. To learn more about our services and discuss your asset protection options, contact us today.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
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