How to Protect Yourself (and Assets) From Personal Liability During Estate Planning

Estate planning isn’t just about deciding who gets what after you’re gone, it’s also about making sure your hard-earned assets are protected while you’re still here. Without the right safeguards in place, your estate could be at risk from creditors, lawsuits, or excessive taxes. With some planning, you can shield yourself and loved ones from unnecessary financial burdens. At Maimone Legal, we’re here to guide you through the process so you can secure your legacy with confidence. 

Establish a Trust 

Setting up a trust is one way to keep your assets safe from legal claims and creditors. It moves ownership of your assets from your personal name to the trust, offering protection. 

● Revocable Trusts: Allow you to maintain control over your assets, but they don’t provide strong protection from creditors since they’re still considered part of your estate. 

● Irrevocable Trusts: Once you place assets into an irrevocable trust, they’re no longer legally yours, which protects them from lawsuits. 

● Specialized Trusts: Options like asset protection trusts, spendthrift trusts, and Medicaid trusts can be customized, ensuring your wealth stays protected and available for beneficiaries. 

Use Business entities for Asset Protection 

If you own real estate, a business, or other significant assets, structuring ownership through a business entity can provide legal protection: 

● Limited Liability Companies (LLCs): Transferring assets like rental properties into an LLC separates them from your personal finances, so your personal assets won’t be at risk if legal issues arise. 

● Family Limited Partnerships (FLPs): These help manage and transfer family wealth while reducing estate taxes and shielding assets from lawsuits. 

● Corporations: If you run a business, incorporating it ensures your personal assets remain separate from business liabilities. 

Obtain Adequate Insurance Coverage 

Insurance acts as a safety net, offering an added layer of financial security. Consider these essential policies: 

● Umbrella Insurance: Extends coverage beyond your standard home and auto policies, providing extra protection in case of a lawsuit. 

● Professional Liability Insurance: If you’re a business owner or work in a profession prone to legal claims, this coverage protects you from malpractice or negligence claims. 

● Long-Term Care Insurance: With healthcare costs on the rise, this insurance helps protect your assets from being drained by long-term medical expenses. 

Structure Asset Ownership Wisely 

How you own your assets can make a big difference when it comes to liability protection. Here are a few ways to structure ownership: 

● Tenancy by the Entirety: If you’re married, this ownership structure can protect your home from creditors pursuing a claim against one spouse. 

● Joint Tenancy with Right of Survivorship: This allows assets to transfer directly to the surviving owner without going through probate. 

● Retirement Accounts & Life Insurance Policies: Ensuring proper beneficiary designations prevents unnecessary legal complications and keeps these assets safe from creditors. 

Create a Comprehensive Estate Plan 

A well-structured estate plan includes key legal documents that provide protection and clarity: 

● Wills & Trusts: These ensure your assets are distributed according to your wishes, avoiding unnecessary legal disputes. 

● Power of Attorney: Naming someone to handle financial/legal matters if you’re incapacitated can prevent unauthorized access to your estate. 

● Healthcare Directives: A living will and healthcare proxy ensure that your medical wishes are honored. 

Plan for Business Succession 

If you own a business, failing to plan for succession can create chaos for your employees and loved ones. A solid business succession plan should outline: 

● How Ownership will be transferred 

● Who will take over management 

● How the business will remain financially stable 

Proper planning can prevent legal battles and ensure the business remains in capable hands. 

Stay Updated on Laws and Regulations 

Estate planning laws change frequently, and regulations vary by state. Working with an experienced estate planning attorney ensures that your plan remains up to date and takes full advantage of current asset protection strategies. 

Estate planning isn’t just about passing down wealth, it’s about making sure you and your loved ones are financially secure, no matter what happens. By incorporating trusts, business structures, insurance, and strategic asset ownership, you can protect your estate from potential threats. At Maimone Legal, we’re here to help you navigate the complexities of estate planning with confidence. Reach out to us today to create a plan that safeguards what matters most to you.