Parman & Easterday – Asset Protection Planning
Estate planning should be about more than simply designing a roadmap for the distribution of your assets after you are gone. A well thought out estate plan should also help protect and grow your assets over the course of your lifetime. Protecting your estate assets begins with recognizing the potential threats to your assets. The asset protection planning attorneys at Parman & Easterday will then help you to incorporate tools and strategies into your comprehensive estate plan that address the potential risks to your assets. By focusing on ways to protect your assets today, you increase the likelihood that you will have substantial assets left to pass down to your love ones after you are gone.
How Might Your Assets Be at Risk?
Before you can create an asset protection component within your estate plan, you must first identify possible threats to your assets. Some of the ways in which your assets might be at risk are fairly obvious; however, there are probably ways in which your assets are at risk that you have not thought of before now. Some common ways assets might be at risk include:
- Gift and Estate Taxes — the federal gift and estate tax is a 40 percent tax on the transfer of wealth that is collected from your estate during the probate of your estate.
- Long-Term Care Costs — if you, or a spouse, need LTC as a senior, the high cost of that care could threaten your retirement nest egg.
- Divorce — even in states without community property laws, a divorce could seriously threaten your assets if you do not make a conscious effort to protect them.
- Incapacity – if the wrong person is in charge of your assets during a period of incapacity that person could seriously deplete your assets in a short period of time.
- Family and Other Beneficiaries – your own beneficiaries may be the biggest threat to your assets if they have an addiction or gambling problem, are a spendthrift, or otherwise squander an inheritance.
- Small Business Debts and Liabilities – if you are a small business owner, the debts and liabilities of the business could threaten your own personal assets.
How Can You Protect Your Assets in Your Estate Plan?
Although it’s true that your assets could be at risk from a variety of potential threats, the good news is that there are also a variety of estate planning tools and strategies that can help protect against those threats. The asset protection planning component you create will be tailored to your specific needs and goals; however, some common ways to protect assets include:
- Tax Avoidance – making use of tax avoidance strategies to transfer wealth during your lifetime can dramatically reduce your estate’s exposure to gift and estate taxes after you are gone. For example, the yearly exclusion allows you to make gifts valued at up to $15,000 (as of 2019) to an unlimited number of beneficiaries tax-free each year without using up any of your lifetime exemption.
- Medicaid Planning – LTC costs may cause you to turn to Medicaid for help; however, because Medicaid has a very low countable resources limit, you could be forced to “spend-down” your assets if you failed to plan ahead. Incorporating a Medicaid planning component into your estate plan now ensures that you will meet the program eligibility guidelines without putting your assets at risk in the future.
- Incapacity Planning – incapacity planning allows you to decide ahead of time who will be in charge of your assets as well as who will make important decisions for you if you suffer a period of incapacity down the road.
- Creating a Trust – trusts can help protect assets in a variety of ways. An irrevocable living trust places assets outside of the reach of creditors and other threat to those assets. A trust also lets you retain a certain degree of control over how a beneficiary can use assets that are gifted to him/her and can protect assets from division in a divorce.
- Business Succession Planning – a business succession plan can do everything from helping you choose the right legal entity for your business to creating a plan to successfully pass the business down to the next generation – all of which is aimed at protecting your financial investment in the business.
Contact the Oklahoma City Asset Protection Planning Attorneys at Parman & Easterday Today!
At Parman & Easterday our experienced asset protection planning attorneys are committed to helping you protect the assets you accumulate over the course of your lifetime. We will help you select the asset protection planning tools and strategies that work best for you and your unique needs. Contact the experienced Oklahoma City asset protection planning attorneys at Parman & Easterday by calling 405-843-6100 or 913-385-9400 to schedule your appointment today.