All tagged asset protection
There are many reasons why parents may want to consider protecting their kids’ inheritance for them in an asset protection trust. Some of these include: They are bad with money; they are disabled and depend on government programs; they have creditor issues or face bankruptcy; they have lawsuits against them; or they are in high-risk professions for being sued. As you can see, the reasons can range from negative behaviors, to things beyond their control, to having achieved some level of success.
One of the things that couples should consider when doing their estate planning is: What happens to my assets if my surviving spouse remarries? Many people worry that their assets will eventually go to their surviving spouse’s new partner, rather than the kids, and they are right to worry. That is how things end up most of the time. But there are some ways that you can plan to avoid that happening, if this is a concern that you have.
I have been watching an HBO show called Big Little Lies, which is a fantastic show, but also has some lessons on estate planning. [Spoilers!] In a recent situation this season, a character named Renata (on the left in the photo above) learns that her husband is in trouble for insider trading, and that because of the way they own their assets as a married couple in the state they live in (California), everything they have is at risk and they must declare bankruptcy and sell off everything that the bankruptcy trustee tells them to sell—their home, Renata’s wedding ring, everything. To make matters worse, Renata finds out at the bankruptcy hearing that her husband has been procuring sexual favors from the nanny and promising her additional compensation for her services. This is all a huge blow to Renata, who came from a poor background, worked for everything she built, and is now having everything taken away due to her husband’s actions.
From time to time, I get a call from an old or prospective client who wants to know what to do now that they have run into a lot of money, either through receiving higher income or through receiving a large lump sum due to inheritance, lawsuit win, or other event. There are several key areas to keep in mind, but the overall rule is to call your estate planning lawyer and accountant right away.
I got this question on my Facebook page, and I’m not entirely clear about whether the question was meant to be about business planning or estate planning, but it’s a great question either way, so I’m going to make this question a two-for. I’m going to answer this as it relates to business planning in the first video, and in the next video, I’ll answer it as it relates to estate planning.
So, the question is: How do I get started? What can I do myself and what do I need a professional for?