We continue to receive inquiries from clients in search of ways to protect the assets they leave to their children and beneficiaries from divorce, law suits and creditors. Although clients protection from tax liability is of continued importance, asset protection in estate planning has grown in significance. Clients recognize that 50% or more of the assets left through their wills and revocable living trusts can ultimately be lost by their beneficiaries. We have continued to develop strategies for increasing the protection of the inheritance left to adult beneficiaries from loss to a divorcing spouse, plaintiff or other creditor. Take a look at the recent guide that I published on AVVO regarding the benefits of the Beneficiary Controlled Trust as an asset protection tool. This guide will help further explain a great asset protection strategy to employ under wills and revocable living trusts for inheritances left to beneficiaries of ages and abilities.

Please call or email me for further discussion on this and other estate planning topics.
Douglas L. Kaune
dkaune@utbf.com
610-513-2288

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For most of us, the process of estate planning is something that we endure for the benefit of our family, friends, and/or a favorite charity.

You want your legacy to go where you want it to go. And, to a greater or lesser extent you might also want it to be used in a particular way or for a particular purpose. And, to that end you fill out papers, visit a lawyer, and sign the documents prepared for you.

You might also be motivated by a desire to make sure that the least amount possible is expended on lawyers, accountants, taxes and probate fees. These are all good and noble goals. But they don’t focus on you. They are focused on someone else.

However, there are some very good reasons that you might consider estate planning and the related concept of asset protection planning as a gift to yourself as well as a spouse or loved one.

You see, when you do an effective estate plan, it is important to do a review of all of your assets and liabilities. You must get a good picture of how much you have, what the estate is made of, what the assets are worth, and to determine how liquid or illiquid they may be.

It is also important to determine how they are owned. For example, do you own real estate outright or jointly with others? Or, do you own it in a protective entity such as a Limited Partnership or asset protective trust? The answers to those questions matter in estate planning, but they also matter in asset protection planning for yourself.

And, if you are incapacitated, without a power of attorney, you do not get to select who manages your assets. You might want to make that selection so that when you come out of a coma, the assets are still there and that they have been well managed.

When you do these reviews you will also spot your financial vulnerabilities. You find out if you’re on track to retire when and where and in the manner you desire or if you need to make adjustments.

You will also discover your litigation vulnerabilities. Can you be sued and subjected to harassment by an unjustified lawsuit or are your assets properly insured and protected? what is the right level of protection for you and how much does security cost? Is insurance enough or should you set up trusts, businesses entities or even more complicated protection planning? The answer is different for each person based on the risks that you face and the level of your own risk aversion.

If you have helped a child or children to buy a house or start a business have you protected them from losing that asset in a divorce or a lawsuit? And if you haven’t, could such a divorce or lawsuit affect your own plans? That is, if a child lost all that they had made and what you had given them would they now be a financial burden on you that might change those elaborate retirement plans that you have?

The estate planning process, when done correctly, can be a massive benefit directly to you during your lifetime. It can protect assets and lifestyle for you and your family.

Finally, when planning is done properly, your spouse, partner, or family members will know that it has been done, will know how to react if something happens and will have a sense of security not fear. That security results in a feeling of calm that is worth the time spent. That is a gift worth giving to yourself and your most loved one. If you think I am wrong just ask your spouse. “Honey, do you want me to do estate planning and to put everything in order so that it’s protected? Or, Should I just leave things the way they are?”

By: David M. Frees III, Esquire
610-933-8069

For more information on How to do Enhanced Estate Planning and asset protection planning, How To Hire The Best Trust and Estate Attorney for Your Particular Needs, and/or my report on The Ten Most Common Mistake Pennsylvania Executors Make and How To Avoid Them, or just click here for more resources from Dave Frees.

David M. Frees III, Esquire
Offices in West Chester, Malvern and Phoenixville
Unruh, Turner, Burke and Frees serves clients through out Pennsylvania
including Chester County and Montgomery County,and the communities of Wayne, Devon,
Berwyn, Exton, West Chester, and many others.
610-933-8069

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