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Experienced, Compassionate Legal Guidance For The Issues Of Aging

Asset protection planning is about someone’s comfort and legacy

On Behalf of | Nov 24, 2023 | Financial Planning

Discussions about estate planning often focus on someone’s legacy. People want to know exactly what will happen with their property when they die and seek to provide as much as they can for their closest or most vulnerable family members. The best estate plans in Colorado look not just at the long-term impact that documents will have on someone’s legacy but also at their needs as they age.

Many older adults find themselves in a difficult position once they retire. They may still incur new expenses or have responsibility for debts they took on long ago despite now having to live on a fixed income. Testators may worry that their resources are vulnerable should an outside party take legal action against them after they retire.

People may also worry about what their financial obligations might mean for the inheritances they allocate for their family members. Asset protection planning as someone prepares for retirement can be a way to protect them from aggressive collection activity as they age while strengthening their plans for their legacy.

What is asset protection planning?

The goal of asset protection planning is to preserve the most valuable resources accumulated by an individual or couple when their financial circumstances change. Individuals in high-risk professions, like entrepreneurs, sometimes put together asset protection plans well before they think about retiring as a means of limiting their personal liability related to their profession.

Many others only start to worry about threats to their resources or their final legacy when they will no longer be able to work to maintain and afford those resources. Asset protection planning often involves making changes to how people hold title for their most valuable assets and diminishing their personal property. Property that does not belong to an individual is less vulnerable during litigation.

The creation of a variety of different documents can help protect people from incapacity, lawsuits and medical challenges as they age. People may use assets to fund a trust. They may also transfer certain resources to beneficiaries long before they die. The goal is to protect those assets from creditor claims in civil court while someone is still alive or in probate court after they die.

The exact strategy employed will depend on the nature of the resources, the age of the person planning and other details about their situation. Reviewing one’s current finances and final legacy wishes may benefit those who wish to preserve as much of their resources as possible during retirement and after their passing.