Do I Need to Protect My Assets?

Everyone wants to be able to pass along treasured and valuable possessions to their friends and family. Whether it’s a precious family heirloom, real estate, or just a cash inheritance, we want those close to us to inherit our assets. However, depending on certain circumstances, your assets may be vulnerable after you’re gone. Some people think that, if they pass away while in debt, those debts are cleared or their creditors are “out of luck.” This is not true. 

Under certain circumstances, creditors can still pursue your debts after you’re gone. This can include seizing certain assets to pay off debts. That’s why an asset protection attorney is vital for anyone planning their estate or drafting a will. An asset protection attorney can ensure your loved ones inherit your estate instead of someone else.

What are Assets?

Assets are anything with monetary value. A person’s net worth is the total value of their assets. Assets include money, cars, houses, investment properties, businesses, personal belongings, bank accounts, and other valuable items. If it can be sold for cash, it’s likely an asset.

Most assets may be subject to estate claims after death, including Medicaid estate recovery and certain unpaid obligations. When an estate becomes vulnerable to these post-death claims, creditors or state agencies may collect against the estate before assets can pass to heirs.

How Can I Lose My Assets?

Many people assume that only the very wealthy have to worry about their estate being claimed after death. In reality, ordinary families can also face estate recovery or creditor claims that reduce what their loved ones inherit.

Some common reasons an average person’s estate may face claims after death include, but are not necessarily limited to:

• Medicaid Recovery
• Unpaid State or Federal Taxes Owed at the Time of Death
• Unpaid Lawsuit Settlements or Court Judgments at the Time of Death
• Unpaid Debts Owed at the Time of Death (such as medical bills or credit accounts)

Medicaid Recovery is the process of collecting money to cover payments made for certain healthcare services under Medicaid, including but not necessarily limited to care facility costs and related expenses. Your estate may also face claims after your death if you owed any state or federal taxes or if there were outstanding court judgments at the time of your passing. These claims must typically be resolved before assets can be distributed to your heirs. This highlights why consulting an experienced asset protection attorney is essential.

What is Asset Protection?

Asset protection is a legal strategy within estate planning that helps ensure your assets are preserved for your intended heirs by reducing the impact of post-death estate claims, such as medicaid estate recovery or other valid creditor claims. Certain obligations must be settled after someone passes away, and without proper planning, an estate can be substantially reduced before distributions are made.

Many people neglect asset protection because they assume their debts disappear when they die or that whatever they leave behind will automatically go to their heirs. Others may worry that planning ahead is the same as “hiding” assets. In reality, estate-focused asset protection is a lawful and transparent process that organizes your affairs so that as much of your property as possible passes to the people you choose.

A key approach is transferring assets into a trust. A trust is a legal arrangement that can hold assets and determine how they are managed or distributed after your death. Depending on the type of trust, transferring assets into it may change how they pass to your beneficiaries, but it does not automatically prevent estate or creditor claims. A trustee manages the trust according to your instructions, ensuring a third party controls your assets if they are threatened.

Transfer on Death Deeds (TODDs) allow Indiana real estate to transfer directly to a named beneficiary without probate, though they do not prevent valid creditor or medicaid estate recovery claims. As the name indicates, a TODD is a unique type of deed that automatically transfers ownership of the listed property to the named recipient once the current owner dies.

Assigning right of survivorship is another strategy. Under this arrangement, you will legally co-own certain property with another person to whom you assign the right of survivorship. If you pass away, full ownership will automatically pass to the other person. This can help reduce the likelihood that the property becomes part of the estate and subject to post-death creditor claims, since ownership transfers to the surviving co-owner upon your death.

These are only a few examples of common asset protection strategies. An experienced asset protection attorney can review your finances and plans for the future and help determine the most effective way to protect what’s yours.

Most people believe their property will pass seamlessly to their intended heirs without risk of seizure. This may not necessarily be true. Don’t take risks. Everyone can benefit from planning ahead to protect their assets for their heirs. If you or a loved one wants to learn more about how to protect what’s yours, don’t hesitate to call AJM Legal, LLC today. The experienced asset protection attorneys at AJM are well-versed in a wide array of asset protection strategies. They can review your finances, current economic situation, and plans for the future, and custom-develop a plan that works for you. Don’t hesitate. If you or a loved one wants to learn more about protecting your assets, call AJM Legal, LLC right now at (765) 342-1962 to schedule your free consultation.