There are basic estate planning features that are normally included in any comprehensive plan. However, like with any field, emerging trends, fads, and new information can change a strategy. If you are thinking about creating a plan or making changes to a current one, consider if any of these apply to you and your life.
The basic fact is that our estate and trust administration laws are founded on a vision of one marriage in a person’s lifetime between one woman and one man with one or more children from that marriage only. Whatever the truth was, it is no longer the norm, and this family structure applies to fewer than 25% of American households (stats can be found here!). Because the default probate laws do not usually account for alternative family structures, individuals who do not fit the norm of a single nuclear family must plan their legacy on their own terms.
Digital assets and how those assets are passed on to survivors is a burgeoning concern in estate planning. This includes things like cryptocurrency, but also more traditional financial accounts that only “exist” online. Also, some people earn a living vis-à-vis digital work, and transfer of creative online assets will be more frequently mentioned in wills and trusts. These must specify who will inherit the assets and how they will be administered. Whoever these assets pass to will need proper access to them through usernames, passwords, pins, codes, disabling two-factor verification, etc.
Everyone has a creditor. Two of the most prominent examples are your credit card company and mortgage lender. While you cannot transfer assets to another company to safeguard them from current creditors, you can transfer assets to a specialized trust to protect them from future creditors.
With all of the volatility in the financial markets right now, it may be especially sensible to protect your assets. But, unfortunately, situations change quickly, and the unpleasant reality is that unemployment, threats of litigation, and catastrophic injuries can occur at any time.
Trusts are commonly used estate planning methods to protect assets from creditors, but only specialized trusts can accomplish this goal.
Revocable trusts, as the name implies, can be canceled or changed at any moment throughout your life. These trusts can cause some practical problems for creditors by retaining ownership of your property outside of your name, but the creditors will eventually prevail. Thus, even though lots of people are confused on this point, know that revocable trusts offer no asset protection.
On the other hand, an irrevocable trust with asset protection has conditions that cannot be modified without the court’s approval. This permanently removes your direct access to the trust’s assets. Except for a few limited cases, this more permanent transfer of ownership is what secures the assets from future creditors.
Despite the permanent loss of direct access, you can enjoy asset protection and continuous usage of specific assets via a well-crafted irrevocable trust and the ability to change important provisions like successor trustees and the beneficiaries at your death.
Estate Planning Attorneys Near You
We invite you to browse our site to discover more about what we do and how we can assist you in protecting your loved ones and your legacy. From our educational blog posts that are a quick, easy read to our informative workshops, we are committed to client education. When you succeed, we succeed.
If you’re looking to start (or finish!) estate planning, why not call us to set up a consultation or attend one of our free educational estate planning workshops? We would be delighted to speak with you to get started!