Whether you are just starting out and have a modest estate or you have already amassed your fortune, you undoubtedly want to protect the assets that you do have from all potential threats. What seems like a simple goal may be more complicated than you think because your assets may be threatened in more ways than you realize. The Loveland area asset protection planning attorneys at Zimmer Law Firm discuss protecting your assets from some less well-known threats.
Threats to Your Assets
Most people are aware of some of the more obvious threats to their assets; however, some less obvious threats could just as quickly diminish the value of your estate.
- Your spouse. You may be aware that you could be held liable for the debts of your spouse; however, are you also aware that jointly held property could be lost because of a spouse’s debts or liabilities? Do you know how your marital assets are currently titled? People often pay little attention to the exact wording of a deed or title. What they do not understand is that the type of joint title used can make a huge difference in how secure your interest in the property is.
- Your in-laws. Imagine working your entire life to build up your assets to the point where you know your children will be well provided for even after you enjoy a comfortable retirement. Although you won’t be here to see it happen, after you are gone the sizeable inheritance you left your son is lost to his wife in his divorce or the inheritance you left your daughter is squandered by her husband.
- Long-term care. Although you may prefer not to think about it, you stand about a 50 percent chance of needing long-term care when you enter your retirement years. The cost of that care could diminish the value of your assets in record time if you are forced to use them to pay for that care out of pocket. Medicaid may be able to help; however, you must first qualify for Medicaid. If you did not include Medicaid planning in your estate plan ahead of time, you may be forced into Medicaid “spend-down.” Use up your non-exempt assets until the value of those assets falls below the Medicaid “countable resources” limit. Only then will Medicaid start paying for your expenses.
- Beneficiaries. Your own beneficiaries could be the biggest threat to your hard-earned assets. Once a direct gift is made to a beneficiary, there is nothing anyone can do about how the beneficiary spends those funds or handles those assets. A beneficiary could lose everything to a drug or gambling problem or just because of poor money management skills.
- Estate taxes. All estates are subject to federal gift and estate taxes at the rate of 40 percent. If the combined value of all lifetime gifts and assets owned at your death exceeds the current lifetime exemption, your estate will owe gift and estate taxes, meaning your nest egg is at risk. Furthermore, some states also impose a state-level estate tax that can add to the threats your assets may face.
- Incapacity. Have you ever considered what might happen if you were to become incapacitated tomorrow? If you failed to plan for the possibility of your own incapacity, more than one person may want to take over for you, causing a bitter and divisive legal battle that might create a rift in the family for many years to come. Moreover, because you didn’t plan, you have no control over who is appointed to control your assets. The way to prevent such an outcome is to include an incapacity planning component in your estate plan.
Contact a Loveland Area Asset Protection Planning Attorney
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about how to protect your assets, contact the experienced Loveland area asset protection planning attorneys at Zimmer Law Firm by calling 513-721-1513 to schedule your appointment today.
- Creating a Trust: What to Consider - March 23, 2023
- What You Need to Know about Planning for Elder Care - March 21, 2023
- Can a Trust Be Contested? - March 16, 2023