Too many people have a limited view of what the process of estate planning has to offer. They think about what will happen after they die, which is easy to avoid addressing. It is important to understand that the benefits of estate planning extend well beyond having control over one’s own legacy and providing support for family members after someone dies. Estate planning can also guide the kinds of medical care someone will receive if they are incapacitated due to illness or injury. An estate plan can even extend crucial financial protections to them during their later years of life.
For example, retirement often leads to a tight budget and eventually, changes in health as someone ages. Many older adults need medical care as they age. Asset protection planning is often part of the estate planning process. It may coincide with elder care planning as people contemplate whether or not they will be able to qualify for Medicaid later in life. These are some of the ways that estate planning can even help to protect people from collection activity.
Asset protection as individuals age
Asset protection planning or Medicaid planning are both processes that require people to identify their most valuable assets and take direct steps to protect those belongings. Often, changing ownership is a key part of an asset protection plan. Taking these steps before a creditor lawsuit and years before someone applies for Medicaid will grant the best protections. Later in life, when someone must adjust to life on a fixed budget with limited income during retirement, asset protection planning can help preserve their most valuable resources if they face litigation from creditors because they fall behind on their bills.
Legacy protection after someone dies
Every creditor owed money by someone who dies can potentially bring a claim against their estate afterward. Even Medicaid could potentially seek to recover from someone’s estate and might demand the full value of the benefits provided to a patient prior to their death.
Advance planning that moves property to a trust and otherwise changes ownership can help to keep assets out of probate court and protect them from creditor claims. Seeking legal guidance to learn more about the benefits of estate planning can help someone to approach the process with the right tools and an informed attitude.