There is no one way to plan an estate. This is something to keep in mind if you are tempted by websites advertising do-it-yourself estate planning.
You may find your way to a site that will allow you to download a generic last will or perhaps a living trust. It looks like all you have to do is pay a fee, download a form, and fill in some blanks, and you are all set.
First off, consumer watchdogs such as Consumer Reports have advised against do-it-yourself estate planning because unintended consequences can result. This is true even if you select a last will and a last will is indeed a good solution for you. In addition, though, if you don’t make an informed choice you may not choose the correct vehicle of asset transfer. With this in mind, let’s look at asset protection in Charlotte NC.
Asset Protection Planning in Charlotte North Carolina
What is asset protection? Asset protection involves positioning your financial resources in a way that keeps them safe from creditors and litigants. In North Carolina, effective asset protection techniques can also keep certain assets out of the picture when divorce negotiations are underway.
In a very real sense everyone should be concerned about asset protection to one degree or another. However, some people are naturally going to be more concerned than others. This includes people who are in lines of work that are vulnerable to lawsuits, such as physicians and real estate investors.
Getting back to our original thoughts on do-it-yourself estate planning, if you simply create a last will, you are doing nothing to protect your assets for your own purposes. You’re also doing nothing to protect the assets that you are leaving behind from your beneficiaries’ creditors.
Trusts and Asset Protection
You may automatically assume that assets would be protected if you place them into any type of a trust. But it is important to understand that there are revocable trusts and irrevocable trusts. As the name suggests, a revocable trust can be revoked or dissolved. Therefore, you don’t really surrender ownership of assets placed into a revocable trust because you take these assets back any time you want to for any reason. As a result, assets that have been conveyed into a revocable trust would not be protected from creditors.
Conversely, you do in fact surrender some control when you place assets into an irrevocable trust. You don’t own the assets anymore and can’t demand them back; the trust owns the assets, and the trustee manages them according to the instructions you put in the trust. Because of these restrictions, assets placed in an irrevocable trust may be protected from lawsuit judgments and other creditors; and assets you leave in trust for your heirs can be protected in case they have a divorcing spouse, lawsuit judgments, or other creditors.
To find out more about whether a trust can provide your family with asset protection, contact the experienced estate planning and asset protection attorneys at the Potter Law Firm. We can be reached at (704) 944-3245 (Charlotte, NC and Huntersville, NC) or for individuals in Kentucky, at (606) 324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY).