You have worked hard over the course of your life to accumulate assets and wealth, and you want to pass them down to the next generation. It is one of the most rewarding feelings to know that you have created some form of generational wealth that will better the lives of your family for years to come. However, there are always threats to your assets over time that may keep you from passing them down to your heirs. The last thing you want is for your assets to be depleted before they can be inherited by your loved ones. You need to act now to take steps to protect your assets so they can be effectively preserved.

There are numerous ways that you can protect your assets. Many legal mechanisms can provide you with some degree of protection. However, there are always risks surrounding anything that you do that involves your money. The key is to find the right solution that works for you and get help from someone you trust before it is too late. The first step that you should take is to contact an estate planning lawyer today. The estate planning attorney will review your situation and help devise a solution that is best for you. There is a time when it is too late to establish an estate plan, so you cannot push this off for too long.

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Select Beneficiaries for Accounts

One of the first things you hear about when the topic of estate comes up is probate. You rightfully have to fear this legal process because it can be technical and complex.

The truth is that many of your assets do not even have to go through probate at all. There are numerous examples of accounts that transfer to the beneficiaries on death. All you need to do is provide proof of death to the financial institution, and distribution of assets happens shortly thereafter.

Types of transfer on death accounts include:

• Bank accounts
• Investment accounts
• Retirement accounts
• Life insurance

It is important that you keep beneficiary designations up to date to match your current situation. If there has been any change in your status or family, you must change your beneficiary designations to match. Otherwise, the beneficiary designations that you have in place will still be effective, and your current wishes will not be reflected.

You may want to consider moving assets into these types of accounts because it will be easier to transfer money to loved ones with less hassle. Of course, if there is a better solution, you should not reflexively have money in these accounts.

Prepare a Will Immediately

There are some assets that may need to pass through the probate process. It is necessary for creditors to have a chance to make claims against the estate and for the assets to be retitled and distributed to the heirs. Probate is required when real or personal property is involved.

A will is an important part of the probate process. It is a document that formally states your wishes for your property and how it is to be distributed after your death. In addition, the will appoints someone to manage the estate and deal with important legal issues before the estate can be closed. A will is witnessed and notarized, and it is a binding legal document.

Dying intestate is what happens when you do not have a will. This outcome can cause stress for your family because it can introduce a number of problems. The court will have to appoint a personal representative to handle your estate. The law will determine who gets what property and the percentage that individual heirs will receive. You have effectively surrendered any control over what happens to your assets when you die.

There is a time when it is too late to prepare a binding will. You need to have testamentary capacity. Perhaps the first words in any will is that you are of “sound mind.” If you are not, the will can be contested and can be found invalid by the court. Then, it will be considered as if you died intestate. Thus, if you do not already have a will, it is vital that you begin work on one immediately. You never know what life holds for you and when you might lose the capacity to make the will.

Establish Trusts Whenever Possible

Trusts are a way of preserving and protecting your assets for the next generation. At the outset, one of the primary benefits of trusts is that your family can avoid the probate process altogether because the assets are moved out of your name and titled in the name of the trust. You will select a trustee, who will manage the assets of the trust. Depending on the type of trust, you may be able to make yourself the trustee.

There are two primary types of trust:

• A revocable trust is one that you can change after you have established. This type of trust allows you to avoid probate, but it does not provide the full amount of protection from creditors.
• An irrevocable trust completely removes you from the decision making process and places all power in the name of the trustee. However, since there are no indications of ownership, an irrevocable trust provides the maximum level of protection.

A trust is created through a trust document. You will create the terms of the trust that the trustee must follow. They will take on a fiduciary duty as the trustee, and they must act with a reasonable amount of care and avoid conflict of interest. Your choice of trustee is crucial. Some people choose to select a professional trustee, while others may opt for a trusted friend or family member.

It is important that you know the range of options available to you. In addition, the paperwork must be done correctly for the trust to be valid and to impose the right conditions on the trustee. Mistakes can be costly because you may lose the protection that you need in the future.

Testamentary Trusts

You can move your assets into a trust after you die to allow the estate to avoid probate. Here, the trust is not created when you are alive but takes effect at the time of your death. Your will would specify that the trust is to be created when you die. This type of trust can have any purpose, including protecting your assets for your beneficiaries. Testamentary trusts can provide you with tax benefits, and you can still change the terms of the trust while you are alive.

Special Needs Trusts

There may be a certain family member who you want to provide for in the future because they have special needs. At the same time, you also want to preserve their eligibility for government benefits because it is determined by income and asset level. A special needs trust can preserve assets and use them for the benefit of your loved one with special needs while not showing that they own the assets. This allows you to provide for them while they can still receive disability benefit payments and other help from the government. A special needs trust is irrevocable because the assets need to be completely out of your family member’s name.

Charitable Trusts

In addition to providing for your beneficiaries, you may want to use your assets to support a cause that is close to your heart. Some people choose to establish charitable trusts. Here, you can take a tax deduction upfront for the amount of money that you contribute to the trust. In addition, you can earn income for the trust when you are still alive. Once you pass away, the trust will be titled in the name of the charity. This way, you can also support a charity, in addition to helping your family.

Medicaid Trusts

A Medicaid trust is one key type of trust that can protect your assets from the steep costs of long-term care. Nursing home costs have risen to well beyond $100,000 per year for each resident. If you do not have long-term care insurance, this money will need to come from your own assets. It may only take a few years of nursing home care to deplete all the money that you wanted to pass down to your loved ones.

Medicaid can pay for your long-term care, but only if your assets are below a certain level. Otherwise, you will be expected to use your money to pay for a nursing home until it runs out completely. Medicaid has a lookback period in which they check your assets to see if you moved money out of your name to anyone else. If they find that you did, your application can be denied.

A Medicaid trust moves your assets into an irrevocable trust to preserve them while you can still receive state funding to pay for your long-term care. It is entirely legal to do so, and the trust will be effective if it is established a certain number of years before you actually applied for Medicaid. The assets will need to be moved out of your name entirely, and you will surrender all say in how the assets are managed to a trustee.

Asset Protection Trusts

Your assets can be at risk in other ways. There are others who may threaten your assets at various points. For example, you could be in a car accident, and someone can file a lawsuit against you for millions of dollars. If you do not have enough insurance coverage, they can go after your assets entirely. You will be legally responsible to pay them the difference between your insurance coverage and the amount of their damages if they take you to trial and win. Personal injury lawyers will run asset checks on you if there is a chance that their client will be entitled to your assets. Then, one mistake can wipe out the wealth you have managed to create.

An assets protection trust must be irrevocable and move the assets out of your name entirely for it to be effective. While you cede decision making authority over your assets, you also remove some of the risks to your assets. You can create an asset protection trust overseas or in certain states domestically. These trusts are private, and some may even have difficulty locating these assets should they perform a search.

Contact an Estate Planning Lawyer

Given the variety of options that are available to you, it is important that you understand all of them and what may work best for your family. Further, all paperwork needs to be done correctly for your choices to be effective. Any mistake in the paperwork can place your family in peril and subject them to additional difficulties.

The time to get help from an estate planning lawyer is now when you are relatively healthy and of sound mind. Estate planning solutions may be out of reach when you no longer have the capacity to execute them. It is better to act today when you want to, because when you have to, it can be too late. You can get the peace of mind that comes with knowing your family is protected when they need it. Establishing an estate plan is a small investment that can make your family’s life easier.

On the flip side, the costs of not contacting an estate planning attorney can be dire for your family. Not only can you lose control over your assets, you can lose the assets themselves, depending on what happens between now and the end of your life. In the meantime, your family will need to go through a difficult legal process before title to the assets can be transferred, and it will occur on terms set by the court and the law, as opposed to choices that you make when you are alive. 

Don’t leave the future of your estate to chance. Contact a Seattle real estate attorney to ensure that your assets are protected for your heirs and beneficiaries. Call today.