Estate planning is more than just deciding who inherits your assets—it’s about protecting those assets from potential threats like lawsuits, creditors and taxes.
An effective asset protection strategy ensures your wealth is preserved for future generations while maintaining your financial security today. There are several smart, proactive ways to safeguard what’s yours, including:
1. Trusts
Trusts can be incredibly flexible tools for estate planning. They can help you avoid probate, and keep your assets and personal affairs private and they’re endlessly tailorable to your needs. Irrevocable trusts, in particular, can be a game-changer when it comes to protecting wealth from creditors, lawsuits, dissipation due to divorce and keeping Uncle Sam at bay. You may also want to consider things like Charitable Remainder Trusts (CRTs), Charitable Lead Trusts (CLTs) and Asset Protection Trusts (APTs) as additional alternatives.
2. Gifting
Want to help your family now and reduce estate taxes later? Start gifting! The IRS lets you give a set amount each year without any tax hit ($18,000 per person in 2024). It’s a simple way to move assets out of your estate while benefiting your loved ones today.
3. QPRTs
A Qualified Personal Residence Trust (QPRT) lets you transfer your home to your heirs today but keep the right to live in it for a certain number of years. Once the pre-set term ends, the home belongs to your beneficiaries outright. With the way that property rates are soaring, this reduces the home’s taxable value and cuts down on gift taxes for your heirs.
Estate planning isn’t just about handing down wealth—it’s about protecting it. The right strategies can help you keep more of what you’ve earned and pass it on efficiently. By obtaining qualified legal direction, you can create a plan that preserves your legacy for generations to come.
