Asset protection is an important aspect of completing a comprehensive estate plan, but exactly what does it do and when would you need it? Many consider asset protection to be a business strategy or financial strategy used by those owing debt to protect their assets from being seized by creditors. While this is certainly a component of asset protection, estate planning considers asset protection for other purposes as well, such as:
- Protecting the assets of those unable to manage them:
- Avoiding unfavorable tax consequences of asset transfers;
- Preserving assets for retirement;
- Preserving assets for the support of family members; and
- Planning the opportunities to shelter income and assets for loved ones against the costs of nursing homes and long term care.
An asset is considered to be anything of value, such as bank accounts, stock, real estate and personal property. It would seem on the surface to be a fairly simple issue, if you have too many assets to qualify for certain benefits and to take advantage of a tax opportunity, simply give them away or change ownership. This is not the case – gifting assets, transferring real estate or using a joint account may not protect the asset, can complicate eligibility and result in unfavorable tax situations.
Asset protection is particularly challenging for senior citizens and is best addressed by preplanning and establishing an estate plan that allows contingency planning, long term planning and planning for disability and health care issues.
Special planning techniques are needed to navigate these complicated laws and regulations to maximize asset protection opportunities. An experienced attorney offering asset protection and elder law services explains the process and laws in easy to understand terms and explains the techniques and opportunities that can be used to protect your assets, income and benefits.