Dec 3

A Helpful Look at the Differences between Estate Planning and Asset Protection in Geuga County

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A Helpful Look at the Differences between Estate Planning and Asset Protection in Geuga CountyEstate planning lawyers in Geuga County are most often considered by folks who want to put their end-of-life affairs in order. The lawyer helps them draw up important documents such as powers of attorney and medical directives, as well as a plan for how the individual’s property will be distributed upon his or her death. Wills, trusts, healthcare and financial agents, executors, and trustees…these are all typical topics that a Geuga County estate planning lawyer will discuss with clients.

There may also be a need or a desire to protect one’s assets during his or her lifetime. This could be extremely important to the quality of life of a spouse living at home if the other spouse requires long term care. Asset protection can also help ensure that there is some legacy left for loved ones. There are multiple asset protection strategies that can help minimize, if not eliminate, the potential negative consequences of liability. That includes protection from claims made against an individual, as well as claims against your assets. The former would include things such as property damage or physical harm to another that, though unintentional, may have resulted from your carelessness. The latter would have to do with damage caused by something you own, such as a business or property.

Commonly, if a claim is made against an individual or their property, just about everything that person owns can be put at risk. For example, a judgment against you in a court of law can give creditors the ability to go after your assets in order to be compensated for damages. It can be an unpleasant eye-opening experience for a sole proprietor to discover that because someone was injured in their place of business, creditors may be able to take away personal assets that have nothing to do with the business itself. Thus, if you are a business owner, choosing the right entity for your business is also an important consideration in limiting your liability and protecting your personal assets against claims arising out of your business.

While estate planning has traditionally been thought to focus pretty heavily on wills and trusts to distribute assets after death, there are major advantages to utilizing trusts and other tools during an individual’s lifetime for the individual’s own benefit. Asset protection trusts can be especially helpful in keeping a person’s assets out of harm’s way, which is why working with a knowledgeable Geauga County estate planning lawyer is such an important part of a solid asset protection strategy.

Simply making the decision to create a trust for asset protection purposes, though is not all that is required to fully protect your assets. There are important provisions that need to be included, for instance:

  1. In order to shield assets from creditors, an estate planning lawyer will likely include a “spendthrift provision” in your documents and in any sub-trusts provided for your beneficiaries upon your death.
  2. The trust must be for the benefit of the beneficiaries, rather than the person setting it up, though with a new genre of asset protection trusts you can now benefit from your own asset protection trust in ways that heretofore did not exist.
  3. One or more other provisions will need to be included to ensure that what you leave behind will be protected for your beneficiaries as well, after you are gone.

There are other advantages and limitations to using a trust for asset protection during life, and a good Geuga County estate planning lawyer will be able to work with clients to determine whether it is a useful strategy based on each individual’s needs.