One of the primary goals of estate planning is keeping your wealth intact so that it passes to your loved ones after your death in an unaltered state. Wealth preservation and asset protection have a few similarities, but they are not the same thing. Asset protection is part of an overall wealth management strategy. Asset protection strategies are meant to keep assets from becoming subject to creditors, litigants, and heirs not named as beneficiaries, whereas wealth preservation as a whole is largely centered around growing wealth at a sustainable rate and making use of available tax strategies to lower the tax obligations on the deceased’s estate and his or her beneficiaries.
Talk to your estate planning lawyer about the wealth preservation methods you can use to keep as much of your estate available to your loved ones as possible after your death. The types of assets in your estate will determine which methods are right for you.
Wealth Preservation Methods
There are a few different broad categories of wealth preservation methods. Wealth preservation as part of the estate planning process is one of these categories. A few of the methods that can be part of your estate plan include:
Business succession planning. By creating a business succession plan, you provide guidelines for what will happen to your interest in a business after you pass away. This could be a transfer to a business partner or shareholders, a buyout, sale of the business, or a transfer to one of your loved ones. By creating a business succession plan, you can protect your investment in your business;
Family gifting. Each year, you can give loved ones an unlimited number of cash or property gifts worth $14,000 or less each without incurring a gift tax. Rather than moving assets into trusts or holding onto them until death, many individuals give assets away during their lifetimes through family gifting to bypass the gift tax;
Longevity planning. Long-term care can be quite expensive. It can be prudent to make financial considerations for medical care that can become necessary later, which can mean investing money in stocks and funds so it can cover these expenses. Longevity planning can also involve purchasing permanent life insurance or putting money into trusts to cover long-term care costs later; and
Moving assets into an irrevocable trust. This can reduce your estate’s total taxable value and protect assets from creditors.
Connect with an Experienced Chicago Wealth Preservation Lawyer to Learn More
Do not assume that estate planning is just creating a will. Estate planning is comprised of many different actions, all of which are meant to ultimately preserve your wealth and your desires for its passage to your loved ones after your death. To start working on your estate by creating a comprehensive will, determining your wishes regarding who will have power of attorney for you in the event of your incapacitation, and utilizing effective wealth preservation methods, work with an experienced Chicago estate planning lawyer.