Many wealthy people in Maryland build their wealth through investments such as real estate, stocks and bonds. Even if you don’t have a six-figure income or come from a wealthy lineage, you can still use estate planning strategies to protect your investments.
Taking assets out of your name
Getting sued isn’t on most people’s radar; if you’re like most Americans, you’ve only heard of civil lawsuits on television or in movies. Whether you think you’re likely to get sued or not, you should take assets out of your name.
If you happen to lose a lawsuit, such as for contributing to an auto accident, a judge could require you to liquidate assets to cover a plaintiff’s losses. Placing assets under a trust is one way to protect your assets from creditors or claimants.
Trusts come in many different varieties. One of the strongest types of trusts is the irrevocable trust. Irrevocable trusts permanently take assets out of your name. They also need to have one or more beneficiaries. An extra benefit that irrevocable trusts offer is an exemption from estate taxes.
Trusts also keep your affairs out of the public eye. Unlike other types of estates, trusts don’t have a place in civil courts. Rather, you map out who gets what when establishing the trust, which nullifies the need for probate after your death.
Limited liability companies
If you own real estate or other assets, consider placing them in limited liability companies. This can help shield your assets from lawsuits and creditors.
One of the simplest ways to protect your assets is through a will, which determines who receives your assets after your passing. You can have an estate law attorney help you create a will that conforms to the laws of your state.
Estate planning doesn’t need to be difficult. Educating yourself is the best way to protect your assets for decades to come.