Protecting Your Assets Through Sound Estate Planning

 Posted on January 23, 2018 in Estate Planning

The start of a new year is an appropriate time to devote focus to ensuring that your finances are in order for both the short and long term. This due diligence requires that you give adequate consideration to every resource capable of aiding you and your family in the protection of your assets. Besides savings accounts, IRAs, 401(k)s, and investments in the stock market, estate planning is a tremendous resource in matters of asset protection. Devoting time now to careful estate planning focused on finances related to your business, health, and family can make all the difference in the future, allowing your intentions with regard to your assets to be followed correctly.

How Assets May Be at Risk

Three primary risks faced by assets are:

• Government taxation
• Commingling of business and personal assets
• Capacity-related issues

As you may be aware from following recent political and legislative news, estate taxes are a subject of ongoing debate. Until recently, the federal exemption limit for estate taxes was roughly $5.6 million. This limit has been doubled under the Tax Cut and Jobs Act, thereby prompting appropriate adjustments in individual estate planning. Importantly, however, the Tax Cut and Jobs Act concerns the federal exemption. Sound planning also requires that one account for the Illinois state level estate tax exemption, which is currently limited to approximately $4.0 million.

Besides protecting assets from government taxation as much as is lawful, it is critical that you diligently protect personal assets from creditor liabilities in both business and with regard to the actions of any irresponsible family members. Sound estate planning can safeguard assets from creditors through actions such as the creation of a living trust.

Finally, as you age, the harsh reality is that you may become susceptible to possible mismanagement of your finances – especially if you experience issues with mental capacity. Taking action now while you are of sound mind, through the creation of a will and one or more trusts, will work to protect your assets later.

Planning in the Present to Protect Assets in the Future

Clearly, estate planning is an essential prong of asset protection. Whatever the specifics of your assets and needs, the experienced attorneys of Ariano Hardy Ritt Nyuli Richmond Lytle & Goettel P.C. will work with you to minimize risk and increase protections. Contact a South Elgin estate planning attorney at 847-695-2400 to schedule a free consultation.

Sources:

http://illinoisattorneygeneral.gov/publications/estatetax.html