Protecting assets when estate planning

On Behalf of | Dec 13, 2022 | Estate Planning

When we estate plan, there are a lot of factors we look at, questions we must answer and hard conversations to have with our spouses and loved ones. It is just part of the process. However, what some inexperienced estate planners can miss is the asset protection part of estate planning. And, without that important piece, your entire plan could implode.

Protecting your estate plan from you

The first way to protect the estate of your Donna, Texas, estate plan is to protect it from you. Of course, you want flexibility and the right to change it and update it as you need, but when we say protection from you, we mean protection from your needs later in life.

For example, as you age, there is a high probability that you will need long-term care at some point. However, long-term care can cost hundreds of dollars a day, and even if you only need it for a few years, your estate could be drained of a quarter of a million dollars easily, if not more.

You can avoid this by getting long-term care insurance now. This can pay for those costs outside of your estate. Plus, that policy is protected from creditors later. Or, you can create a Medicaid trust, but unless you are older, a Medicaid trust may not be appropriate for you now.

Protection from everyday lawsuits

Next, to protect your Arlington, Texas, estate, you need lawsuit protection. You have this with your car and homeowner’s insurance, but do you have enough? If you do not have enough insurance, you could face a lawsuit that comes after your estate.

To avoid this, if raising your limits is not feasible, look into adding an umbrella policy that provides coverage when you exceed your normal policy limits. Often, these can be attained for a few hundred dollars a year.

Maximizing your retirement savings

Many retirement accounts have protections from creditors, lawsuits and even the IRS. If you currently have all of your investments in an investment account, talk with your estate planning attorney about moving those investments into a protected retirement account. This will make sure that you do not lose a large portion of your estate.