Estate planning is a process that ensures your estate is protected and your wishes are followed after death. It's more than just a will. It involves proper documentation of your assets, your wishes and appointing an executor of the will to carry out your estate.
The responsibilities associated with your estate planning documents will fall on the shoulders of a probate executor after your death. It's important that the executor is fully prepared to help your estate and beneficiaries move forward with no hitches or problems.
One part of ensuring that estate planning goes smoothly is asset protection. Today, let's explore that aspect of estate planning. Here's what you need to know:
What is Asset Protection?
Asset protection is protecting your assets from the creditors of your estate. Having the right protection in place during your lifetime can protect your estate and your heirs from passing through probate and protect them from future creditors.
Having a will is the first step to protecting your assets. With that document in place, you can leave your estate the way you want in the future, including the amount you leave to each beneficiary, how the estate is dispersed and the terms of the estate's management.
However, once the will is properly created, you need to take a few more steps to ensure you're protected. When putting together your will, you must consider what your estate is worth and who is in a position to challenge its dispersal.
If you don't have the right asset protection measures in place, your estate might be vulnerable to challenges from creditors or other people who have a stake in your will.
Asset Protection vs. Estate Planning
Asset protection has a lot in common with estate planning. Both approaches seek to provide the same protection. The difference lies in the scope of the protection and how each approach achieves it.
Estate planning is a less short term than asset protection. It focuses on protecting your assets during your lifetime. Asset protection, on the other hand, is meant to protect your estate as well as beneficiaries after your death.
And with asset protection, you're protecting your estate from creditors and lawsuits. On the other hand, estate planning concerns the distribution of your estate in a future scenario. It's more concerned with the will itself than the assets it contains.
It's easy to confuse the two, but don't mistake asset protection for estate planning when it comes to your estate. The two concepts serve different purposes and are meant for different scenarios.
The Benefits of Asset Protection
Asset protection can help your beneficiaries after your death. It can also save your estate from creditors, lawsuits and probate challenges. Here are some of the other benefits of having this protection in place:
Helps avoid probate courts. The probate courts have to approve the estate's executor when you have a will. This can put your beneficiaries in a position where they have to deal with a probate court from your death.
The probate courts have to approve the estate's executor when you have a will. This can put your beneficiaries in a position where they must deal with a probate court from your death—protected against creditor claims. Asset protection helps your beneficiaries avoid creditor challenges, such as credit card debt. It can be easier to settle creditor challenges when the right protections are in place.
Asset protection helps your beneficiaries avoid creditor challenges, such as credit card debt.
The Bottom Line
Asset protection can be a part of your estate planning strategy. It should be added after creating your estate's will and all the necessary paperwork. Without this protection in place, your assets could be vulnerable to estate challenges and creditor ones. To find out more about the steps you need to take, contact a lawyer today.
If you are ready to take the next step towards getting your life in order, look no further because we can help you! We have the best financial advisors on Gold Coast. Swell Financial Planning offers various services depending on your specific goals. Contact us today for a better tomorrow.