Asset protection planning isn’t just for those with multi-million dollar homes and business holdings. Anyone who owns real property may want to think about how to preserve their homes and protect them from claims in the future.
During asset protection planning, individuals identify potentially vulnerable resources and may change how they hold those assets to limit the possibility of losing them in the future. For those on the edge of retirement, asset protection planning may be critical for the preservation of their homes.
Why could a home be vulnerable?
People at or past retirement age may have already paid off their mortgages. However, their homes could still be at risk of outside claims.
Perhaps they caused a car crash and now face a personal injury lawsuit. Maybe they require emergency care not covered by Medicare, and the hospital takes legal action against them. Even the Medicaid estate recovery program can place the claim against the home after the owner dies. If outside parties have grounds to make a claim against either an older adult or the estate of someone who just died, the home of the decedent could potentially be at risk.
Prior asset protection planning before incurring significant debts or facing legal controversy can help preserve resources. Older adults who take on co-owners, transfer ownership while they are still alive or choose to hold their homes in trusts can prevent scenarios in which their homes are at risk of liens or liquidation due to outside financial claims.
Identifying resources that could be at risk during probate proceedings or while living on a fixed income can help older adults set priorities for their estate plans. Asset protection planning can be an important step to take when people have property that could be at risk as a result of potential collection efforts.
