You have spent years accumulating your wealth, making smart financial decisions, investing your money, and building your net worth. Unfortunately, a few wrong turns and poor associations can topple your wealth like a house of cards.
Building an asset protection plan works to prevent a financial crumble and it plays an important role in protecting your wealth. When you talk to an estate planning attorney, they can help determine if an asset protection plan is best for you.
Understanding Asset Protection
Your lawyer can help you establish an asset protection plan that works for your specific situation. “Asset protection trusts are typically established by individuals in high risk occupations (i.e., doctors and real estate developers) and very wealthy individuals that realize they are targets for creditors due to their net worth,” explains the American Bar Association. “Asset protection trusts can also be used in lieu of a prenuptial agreement.”
Asset protection plans can protect more than just your wealth. For instance, if you require long-term care, an asset protection plan will help make sure that you do not bankrupt your estate getting the medical care you or your spouse need in later years. You can also use asset protection plans to set up wills and trusts so that your wishes for the maintenance and transfer of your assets will be funded and followed long after you are gone.
There are also some tax-based reasons you might want to establish an asset protection plan. Most notably, you might be able to reduce or eliminate your state income tax bill. Depending on your situation, you might also be able to structure your assets so that certain ones are removed from your estate but you are able to still benefit from those assets. Asset protection plans can help with the tax planning of your estate as well, helping to minimize any tax burden on your heirs. The smarter you plan the effect of taxes on your estate, the better off your estate will be.
An asset protection plan should be a major component of your financial life. Along with business planning, estate planning, retirement planning, and tax planning, asset protection is one of the best defenses you have against probate, third party claims, lawsuits, and other misfortunes. We can pair you with a tax and estate planning attorney who can assist you in building an asset protection plan that keeps you covered when the worst happens. To see how Mann & Kemp can help you, please contact us today at (501) 859-6183 to schedule an appointment.