It is a mistake to assume that only extremely wealthy individuals can benefit from asset protection planning. Many people will spend their entire lives working to build their wealth and leave behind a legacy. However, they often give little thought to protecting that legacy as they go. Read on to learn more about three aspects of asset protection planning.
Most people are familiar with the basic estate planning document known as a will but trusts can be an equally important tool. In order to reap the asset protection benefits of a trust, the trust must be in an irrevocable form. This means that you will also need to give up control over any assets placed inside the trust. Talk to your Arizona estate planning attorney about the power of trusts to shield assets from the claims of creditors.
Making gifts of key assets removes the assets from your estate while benefitting someone else. Gifts can be made either directly, such as a cash gift to a child, or indirectly, such as a 529 college savings plan for the benefit of a child or grandchild. Under the right circumstances, both of these transfers will shield the transferred assets from potential creditors. Your Arizona estate planning attorney can advise you on properly transferring assets out of your estate to others.
Asset protection planning is essentially a plan to minimize the potential for catastrophic loss. Various forms of insurance often provide important components to such a plan. Life insurance, for example, can help surviving family members replace assets lost to business risks. Because insurance proceeds are usually protected from creditors and income taxes, appropriately structured insurance is often an obvious starting point for protecting one’s legacy. Consider discussing with your Arizona estate planning attorney the ways that insurance can complement an estate or asset protection plan.
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 regarding Asset Protection Planning, or any other estate planning matters, please feel free to contact Stephen L. West at 480.461.5341,or Curtis M. Chipman at 480.461.5329. You can also log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.