Estate and Asset Protection Planning
Many people in LaGrange accumulate significant assets throughout their lives. If they die before they take the steps necessary to protect their wealth, though, it can cause conflict among their family members, substantial tax obligations, and distributions that do not reflect their wishes. Additionally, many people face the possibility of losing property via exposure to liability in civil claims. As such, it is smart for parties that wish to safeguard their property during their lifetime and after their death to speak to an attorney about their options. The dedicated LaGrange estate planning lawyers of Wilson & Wilson Estate Planning & Elder Law LLC can offer you advice regarding what estate and asset protection planning measures you can employ, and if you retain our services, our attorneys will develop a comprehensive plan to meet your needs. We routinely help people protect their interests in LaGrange and other cities throughout Illinois.Estate and Asset Protection Planning
It is critical that people with considerable assets use the proper tools to preserve their wealth when they pass away. Trusts are valued tools for helping parties safeguard their property. Once a grantor creates a trust, they will typically transfer property into the trust to be disbursed to those named as beneficiaries by trustees in accordance with the trust terms instead of being transferred directly to heirs or family members being disbursed through a will.Other Types of Asset Protection Strategies
- Domestic asset protection trusts are aimed at protecting your assets from creditors. They are set up as irrevocable trusts and are available in 17 states. Assets in a domestic asset protection trust may include cash, stock, LLCs, business property and real estate.
- Limited liability companies (LLCs) house the assets of a business. This legal structure can protect your personal assets from being seized by business creditors.
- Insurance, such as an umbrella policy or a malpractice policy, can provide protection against lawsuits and other liabilities.
- Alternate dispute resolution is a way to resolve disputes outside of court. It can include methods such as mediation or arbitration.
- Prenuptial agreements can protect assets in the event of a divorce.
- Retirement plans such as a 401(k) or IRA can provide some protection against creditors.
- Homestead exemptions can protect your primary residence from creditors in some states.
- Offshore trusts are set up outside of the U.S. and are governed by the laws of the country in which the trust is set up. They can provide protection against creditors, lawsuits and even divorce claims and civil actions.
Generally speaking, trusts are either living or testamentary. Living trusts are effective during the grantor’s lifetime. The grantor no longer owns property once it is moved into a living trust. Living trusts can be irrevocable or revocable. Only irrevocable trusts offer notable benefits in terms of asset protection, however. Namely, they allow parties to avoid probate and may allow them to avoid estate taxes, protect property in the trust from exposure to creditors or judgments, and provide a reduction in capital gains and income taxes.
Testamentary trusts are effective at the time of the grantor’s death. In most cases, they are created through a will. Testamentary trusts permit parties to control the distribution of their estates and can reduce income and capital gains taxes, and offer protection from lawsuits and creditors as well. Unlike living trusts, though, testamentary trusts do provide relief from probate or estate taxes.
Illinois professionals that routinely offer goods and services or engage in business with other parties can amass significant wealth. As such, they may be concerned that their assets will be depleted via civil claims that arise out of their business dealings. Additionally, they may face claims for other reasons and could be in danger of losing property to creditors.
Fortunately, there are measures people can take to protect their assets, irrespective of the kind of exposure they face. For example, developing family limited partnerships might benefit business or rental property owners. Broadly, a family limited partnership is an arrangement between family members that are actively involved in a business or trade, such as owning investments or real estate. In some cases, a parent will be named as a general partner, and their child or children will be deemed limited partners. Business assets are transferred to the partnership, after which they are generally protected from creditors, judgments, and distribution in divorce actions. Family-limited partnerships also allow general partners to transfer assets to limited partners, which can reduce estate taxes.
Parties with substantial assets often fear that lapses in judgment and inadequate planning could expose them to liability and taxes. It is prudent, therefore, for people with apprehensions about safeguarding their assets or preserving their wealth to meet with an attorney as soon as possible. If you wish to engage in estate and asset protection planning, the capable LaGrange attorneys of Wilson & Wilson Estate Planning & Elder Law LLC can evaluate your circumstances and advise you of the best method to proceed to achieve your goals. We frequently help people address their planning needs in Cook County, including Chicago, Arlington Heights, Cicero, Hoffman Estates, Mount Prospect, Palatine, Schaumburg, Evanston, Skokie, and Tinley Park, DuPage County, including Naperville, Aurora, and Wheaton, and Lake County including Buffalo Grove, Mundelein, Highland Park, and Waukegan. Our main office is in LaGrange, and we have a second office in Northbrook. We also have satellite offices in Orland Park and Warrenville, where we are available by appointment. You can reach us through our form online or at our LaGrange office at (708) 482-7090 or our Northbrook Office at (847) 656-8958 to set up a conference.