When you have assets, you want to be sure they are intact for your loved ones to enjoy after your death. If you’ve worked a lifetime building a business, acquiring assets or investing in real estate you likely want to protect your legacy from lawsuits, claimants and high taxation upon your death. For this, you need to hire an experienced asset protection attorney in Chicago.
Asset protection can take many forms. After an individual’s death, his or her creditors seek repayment for any outstanding debts. Similarly, the Internal Revenue Service (IRS) seeks the repayment of any outstanding taxes the deceased owes. Other parties who can come after an individual’s assets include former partners, relatives, and litigants involved in lawsuits with the deceased. By using estate planning and wealth management strategies like trusts, you can protect your assets from being taken by these parties after your death. Another party to consider protecting your assets from is Medicaid, which can seek repayment for the benefits it paid for individuals over the age of 55 after their deaths.
Protecting Your Assets through Strategic Estate Planning
One important way to ensure that only specified beneficiaries receive your assets after your death is to keep the assets in trusts. When you transfer assets to an irrevocable trust, the assets are no longer your property. They become property of the trust and may only be distributed to the trust’s beneficiaries by its trustee. Since your creditors can only seek payment from assets you own, they cannot come after assets held in irrevocable trusts.
If you hold assets jointly with another party, such as a joint tenancy on a piece of real estate or a business partnership, create a business succession plan or legally restructure the relationship to ensure that your stake in the partnership is clearly defined and protected from parties who might become entitled to it through a lawsuit, divorce, or your partner’s death.
Gifting can be used as an asset protection strategy. Estates worth more than $5.49 million are subject to the federal estate tax. In Illinois, estates worth more than $4 million are subject to a state-level estate tax, as well. Basically, an individual can give away up to $5.49 million in his or her lifetime before being subject to the federal estate tax. Non-taxable gifts to loved ones during the individual’s life count toward this amount and are only subject to a gift tax if they are worth more than $14,000 per year. There is no limit to the number of these gifts an individual can make to loved ones each year, only that individual gift amounts do not exceed $14,000 per year. When a cash or property gift is worth more than $14,000, only the difference between its total value and $14,000 is taxed. Couples can combine their annual gift exclusions to give away a total of $28,000 worth of property to each recipient each year.
Our Experienced Chicago Asset Protection Lawyers can Help You Preserve Your Assets After Death
Estate planning is all about asset management and protection. Careful estate planning goes beyond determining who will receive your assets after your death; it involves the process of keeping the assets intact so your loved ones or assigned charities can enjoy the benefit of them completely. Work with our experienced asset protection law firm in Chicago to ensure that a sound strategy is in place for you and your heirs.