When individuals desire to have property protected, they will go about it in two different ways. These ways involve the use of estate planning and asset protection. Fundamentally speaking, estate planning involves assets being disbursed following death and asset protection is referring to a way that has assets protected.
There are many strategies centering around asset protection so that they are not obtained by anybody. The assets can not be touched by a creditor or in the event of a divorce. A good example of this is when prenuptial agreements are made which designate a spouse as sole business owner and makes the business undividable upon divorce.
When a trust is created, it needs to be written so that a litigant or creditor is not able to seize any asset that a trust holds. Plus, the estate plan can be designed to have money, business interests, and a home protected against government entities in the future if governmental needs arise.
The estate plan involves what actions need to be taken after a death occurs. One action includes a Will and Testament being created. This will highlight all of the final wishes surrounding the assets they have and the way they are disbursed to inheritors. All debts are also highlighted and they method that they are to be paid. The will also has a representative named to take care of everything in accordance to the instructions.
Property rights can be determined once a death occurs and may also involve other actions, such as a power of attorney. With the POA, the individual is able to make decisions for them. The powers of the POA can be very broad or narrow and can be in effect whenever the individual wishes or once an incapacitation occurs.
In order for an effective power of attorney to be in effect legally, it must become a durable power of attorney. With an estate plan, there may be a proxy assigned who will make decisions concerning healthcare needs and bring about advance directives.
Conclusion
Although there may be similar strategies to use for both estate planning and asset protection, Asset protection centers more around individuals who are living and the estate plan centers around those who have passed. So when you consider either of these strategies, the assets can be protected the best way possible. When you are ready to either have an estate plan created or have assets protected, we are here to help you along the way. Give us a call today to get started.