One of the basic goals of estate planning is to protect a person’s wealth so that their loved ones can enjoy it.
For example, without some careful estate planning, Massachusetts residents may have to watch their hard-earned savings instead get swallowed up in nursing home and medical bills or go to reimburse a government healthcare program.
Likewise, considering taxes when doing estate planning can reduce the amount of federal and Massachusetts estate taxes which a person’s loved ones would otherwise wind up absorbing.
Wealth protection involves more than long-term care, taxes
Threats to a person’s legacy can come from many other directions as well.
In some cases, a person may have creditors seeking their payment from the funds of the estate. On a related point, many Massachusetts residents are at risk of being personally sued, which could expose their assets to collection.
It is also important for people to think about their loved one’s financial habits and potential creditors.
A person would not want to leave an inheritance to, for example, one of their children if doing so would mean the inheritance winds up in the hands of that child’s creditors.
In all cases, it is important for people to think broadly about potential creditors when planning their estates. Former business partners could be potential creditors. Ex-spouses also could pose a risk to the assets of an estate.
There are many valid strategies people can use to protect their wealth so their loved ones can enjoy it.
For example, it sometimes makes sense to set up a trust, a family partnership or an LLC in order to shield assets from potential creditors. A skilled estate planning attorney can help set up these protective legal devices.