One of the many components of comprehensive estate planning is wealth preservation. You not only want your assets distributed according to your wishes, but you want them safeguarded before and after you die.
A common misconception about wealth preservation is that you have to be wealthy. But you don’t have to be rich to achieve peace of mind when protecting your family’s interests. Trusts, insurance policies and other remedies can protect your estate from creditors, estate taxes and lawsuits.
Wealth protection strategies
It’s advisable to consult with an experienced estate planning attorney as each person’s needs are different. Your lawyer can utilize the following strategies to protect your wealth:
Irrevocable Trusts
While you are no longer the owner of assets transferred to an irrevocable trust or control how they are distributed, creditors can’t access them, even if you are a beneficiary.
Insurance Policies
Life insurance can eliminate or reduce income, estate and gift taxes while providing lump-sum payments to your heirs. Other types of insurance – liability, property and casualty – protect against multiple legal risks. If you are a professional exposed to frivolous lawsuits, an umbrella policy adds a higher level of protection than standard policies.
Asset Protection Trusts
Tennessee has one of the strongest trust codes in the United States, and the protections have increased under legislation recently signed into law. Some of the features of self-settled asset protection trusts are the length of time they can exist, minimizing state taxes and the inclusion of preexisting trusts. Two of the most common self-settled asset protection trusts are:
Tennessee Investment Services Trust or TIST
Tenancy by the Entirety Trust or TBE
Choose a strategy to fit your needs
Your lawyer may also suggest other options, such as retitling assets or creating a limited liability entity to separate business holdings from your personal assets. Depending upon your situation, a combination of these strategies may be in your best interests. Discussing those options sooner rather than later is a solid first step to protecting you and your family.