You are retired—you may have sold your business, but your retirement and legacy may still be at risk. Many retirees are taking on risk in their personal capacity. Sitting on a board (paid or volunteer), dabbling in other businesses, or driving a recreational vehicle are examples of situations wherein if someone suffers a loss, they may sue you and become your creditor or that of your estate. Your estate is comprised of many different types of assets. Some of them by nature are more protected from creditors than others. If you want the utmost control over the value of what you leave to your beneficiaries, you need to know what assets require specific measures to protect.
Without smart and proactive planning, some of your most important personal assets may be unnecessarily vulnerable to creditors during the settlement of your estate. Monetary assets such as cash or investments, as well as real estate and others, each need to be carefully considered within their own circumstances so that you can implement a strong line of defence in advance. Even those which you might think are safe, such as a principal residence or retirement account, could be vulnerable if you haven’t taken the right steps to secure exemptions or arrange bequests in a strategic and tax-effective manner.
All business owners should be diligent in shaping their estate plan to preserve the value of their company. Shares, investments made through the business, real estate purchased for operations, and other assets can be diminished by creditors upon your death if the right measures aren’t taken to minimize the damage. It’s key to consider your operating structure, for instance. If the business you own isn’t incorporated and it goes through probate, your personal assets could be fair game when it comes time to settle business debts. Your estate plan should be built to protect what you’ve worked hard to build.
While there are many cases in which fully shielding certain assets from creditors isn’t possible, or indeed legal, an estate plan with an integrated asset protection strategy is still essential. Many tools are in place to help. Irrevocable trusts, for instance, can enable strong creditor-proofing when implemented properly. Liability insurance, gifting assets to a spouse, and transferring assets into retirement accounts are also common strategies. However, the effectiveness and legality of these strategies depend on how you execute them and on regional differences in law. Work with estate planners who can help protect your assets properly!
You want the best for your family and other beneficiaries. When your wealth becomes your legacy, it’s only right that this legacy is truly faithful to your wishes. Call 1-833-266-6464 today and our estate planning specialists will give you everything you need to make this a reality.