Asset protection is an important part of preserving and nurturing your assets. The best time to engage in asset protection is when things are going well and you don’t have any specific legal claims or exposure against you. Many people put off asset protection until it is too late and they’re experiencing a financial crisis. Taking time to protect your assets can help you, your surviving spouse, and your beneficiaries in the long run.
The attorneys at Jones Gregg Creehan & Gerace provide safe, cost-effective, and proactive asset protection services for clients in the Pittsburgh area. We will take the time to understand your financial situation and identify and eliminate or decrease as many risks to your assets as possible. We can also ensure that your assets survive your life without unnecessary losses and will be distributed to your chosen beneficiaries. Contact Jones Gregg Creehan & Gerace today to schedule a case evaluation.
Asset Protection During Life
An important part of asset protection is to have a comprehensive financial plan during your lifetime. When you work with Jones Gregg Creehan & Gerace, we will evaluate your current financial status, including calculating your net worth and assessing your retirement goals. Your financial plan should be combined with a comprehensive estate plan.
Creating a family limited liability company, charitable trust, or irrevocable life insurance trust could help you protect your assets now and in the future. You may benefit from creating a Qualified Personal Residence Trust if you’re located in Pennsylvania. Protecting your assets through one or more trusts can help you meet your retirement planning goals.
Asset Protection for a Surviving Spouse
If you are married, asset protection can help ensure that your spouse provides for you after you pass away. One way to protect your spouse is to create an AB trust system. Other names for this type of asset protection strategy include bypass trusts, family trusts, marital trusts, or QTIP trusts. You and your spouse will create trust A and trust B. By creating an AB trust system, the spouse who passed away first can provide care for the surviving spouse while preserving important death tax exemptions.
Another benefit involves protecting future spouses and creditors. An AB trust can also be drafted to ensure assets pass to the deceased spouse’s children or other surviving family members when the surviving spouse passes away, preventing a second husband or wife from inheriting the assets. Creating an AB trust system ensures your surviving spouse’s assets will be protected.
Protecting Your Assets for Other Beneficiaries
Creating a comprehensive estate plan protects your assets and ensures they are distributed to the beneficiary or beneficiaries you select. You may be concerned that your assets will be distributed to someone other than your chosen beneficiaries. For example, one or more of your adult children or grandchildren may have a job or a profession that exposes them to liability. You may be concerned that one of your beneficiaries will go through a high-conflict divorce. As a result, most of your hard-earned assets will go to your beneficiary’s ex-spouse. By engaging in an asset protection strategy, you can set up your estate to protect your other beneficiaries from lawsuits, divorces, and creditors.
Create lifetime trusts for your beneficiaries instead of leaving them a lump sum outright in your will. Creating a lifetime trust allows you to set up the trust for beneficiaries irrevocably and be funded with assets the beneficiary doesn’t own. Because the trust isn’t self-created, it protects the beneficiary. Another strategy would be to create a trust through your will that allows your beneficiaries to use the assets and income from the trust while protecting the assets from your beneficiary’s potential creditors. These types of trusts are often called beneficiary-controlled trusts.
Medicaid Trusts for Protecting Assets
Planning for incapacity is an essential aspect of estate planning. Many people will need long-term care services in a nursing home. Without careful planning, a person’s estate could be drained by expenses related to staying in a long-term care facility. Medicare and most private health insurance plans do not cover stays in long-term care facilities. Living in a long-term care facility in Pittsburgh costs an average of $3,250 per month. Many long-term care facilities cost over $5,000 per month.
Applying for Medicaid, which provides coverage for nursing home stays, can help protect your estate assets. However, to qualify for Medicaid benefits, you must show that you have fewer than $2,000 of assets. For a Regular Medicaid, Aged Blind, and Disabled Applicant, the asset limit is $3,000. Creating an asset protection trust allows you to transfer your assets into an irrevocable trust. The assets within the trust are not considered assets to qualify for Medicaid. The sooner you create an asset protection trust, the better. Medicaid has a five-year lookback.
When you transfer assets into a trust within five years of applying for Medicaid, those assets will be considered a gift under Medicaid regulations and will work against you. When the “gift” is over five years old, you won’t have to include it in your Medicaid application. Creating an irrevocable trust could save you and your estate tens of thousands of dollars you would have had to pay for long-term care in a nursing home. Instead of paying for nursing home care, you can distribute your estate assets to your beneficiaries or a charity of your choice after you’re gone.
Learn More About Effective Asset Protection Strategies
Working with an asset protection attorney can save you and your estate significant money. The sooner you begin working to protect your assets, the more effective your strategy can be. If you start the process now, you can protect your estate from potential problems due to creditors and lawsuits. Whatever your financial situation, the skilled Pittsburgh asset protection attorneys at Jones Gregg Creehan & Gerace are here to help. Contact us today to schedule an initial consultation and learn more about how we can help you protect your hard-earned assets.