Whether you are just starting out and have a modest estate or you have already amassed your fortune, it is probably safe to assume that you want to protect the assets that you do have. Accomplishing this seemingly simple goal may be more complicated than you think, due in large part to the fact that your assets face more threats than you likely realize. To illustrate, the Bowie asset protection attorneys at Sinclair Prosser Gasior point out five threats to your assets that you may not have considered.
Threats to Your Assets
Most people are aware of some of the more obvious threats to their assets; however, some less obvious threats could just as quickly diminish the value of your estate.
- Your spouse. You may be aware that you could be held liable for debts of your spouse; however, are you also aware that jointly held property could be lost because of a spouse’s debts or liabilities? Do you know how your marital assets are currently titled? People often pay little attention to the exact wording on a deed or title. What they do not understand is that the type of joint title used can make a huge difference in how secure your interest in the property is.
- Your in-laws. Imagine working your entire life to build up your assets to the point where you know your children will be well provided for even after you enjoy a comfortable retirement. Although you won’t be here to see it happen, after you are gone, the sizeable inheritance you left your son is lost to his wife in his divorce or the inheritance you left your daughter is squandered by her husband.
- Long-term care. Although you may prefer not to think about it, you stand about a 50 percent chance of needing long-term care when you enter your retirement years. The cost of that care could diminish the value of your assets in record time if you are forced to use them to pay for that care out of pocket. Medicaid may be able to help; however, you must first qualify for Medicaid. If you did not include Medicaid planning in your estate plan ahead of time, you may be forced into Medicaid “spend-down.” Use up your non-exempt assets until the value of those assets falls below the Medicaid “countable resources” limit. Only then will Medicaid start paying for your expenses.
- Beneficiaries. Your own beneficiaries could be the biggest threat to your hard-earned assets. Once a direct gift is made to a beneficiary, there is nothing anyone can do about how the beneficiary spends those funds or handles those assets. A beneficiary could lose everything to a drug or gambling problem or just because of poor money management skills.
- Estate taxes. All estates are subject to federal gift and estate taxes at the rate of 40 percent. If the combined value of all lifetime gifts and assets owned at the time of your death exceeds the current lifetime exemption, your estate will owe gift and estate taxes, meaning your nest egg is once again at risk. Furthermore, some states also impose a state level estate tax that can add to the threats your assets may face.
The good news is that your estate plan can help you protect your assets from all these threats as well as a number of other threats. The key is to start your estate plan early on in your life and update it on a regular basis.
Contact the Bowie Asset Protection Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about protecting your assets, contact the experienced Bowie asset protection attorneys at Sinclair Prosser Gasior by calling (410) 573-4818 to schedule an appointment.