One of the reasons that people try to preserve their wealth during their life is so that they have the opportunity to leave behind a legacy for the people they love. An estate plan helps people set aside assets for specific people or even charitable causes.
Major assets like the family home are often the cornerstone of an estate plan. However, the most valuable assets can be the most vulnerable ones when they die.
If you haven’t taken the time to engage in asset protection planning but have accrued debt or need Medicaid benefits, it’s possible that your family members will not have the right to inherit the home you leave behind.
Creditors have the right to seek repayment
When you die with debt, the people and companies that hold those debts can still legally seek repayment. They can bring a legal claim against your estate in order to force repayment before your executor distributes assets to your heirs.
Creditors won’t just come after liquid capital, like the money in your bank account. They can also seek repayment by forcing the executor of your estate to liquidate other assets by selling them off to repay your debts. In some cases, government insurance programs like Medicaid might even place a lien against the property to prevent people from selling or transferring it until they repay the benefits the deceased party received.
Planning now to preserve your assets by transferring ownership or changing the way that you hold them can increase the likelihood of having a meaningful legacy to pass to the next generation. An experienced estate planning attorney can help you.
