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How can an estate plan protect my assets?

On Behalf of | Dec 13, 2022 | Estate Planning |

As we age, our estate plan ages as well. It grows and becomes more and more complicated. But, as your estate grows, your Austin, Texas, estate planning tools should also include protecting the estate from litigation, bankruptcy, medical issues, etc.

Litigation mitigation

Mitigating the potential loss of estate assets to litigation is fairly straightforward. Most litigation will come from negligence in the use of your car and premises liability in relation to accidents and injuries that occur on your property. Car and homeowner’s insurance mitigates these issues.

However, you do have policy limitations that, if breached, could put your estate at risk. This can be solved by an umbrella policy that can also cover for additional liabilities too. And, these are usually only a few hundred dollars to add to your estate plan.

Medical mitigation

Next, your Austin, Texas, estate can be drained by your own medical needs. Medical insurance will cover the vast majority of your medical needs, and when combined with FSA or HSA, your immediate medical needs should be covered. However, if you require hospice or long-term care, your insurance company may not cover these charges. And, if they do, they usually only cover for a few days or up to a month. Medicare also does not cover for these charges.

This is why, if you are young enough to get affordable long-term care insurance, it is an important part of an estate plan. However, if not, a Medicaid trust can be used to qualify for Medicaid and the long-term care coverage that comes with it.

Retirement accounts

Most retirement accounts provide some level of protection from litigation, creditors, bankruptcy and the IRS. However, different retirement accounts offer different levels of protection. Consult with your employer’s Human Resources and estate planning attorney to understand your available options. Then, you can begin using the best option for you, including moving some of your investments into those retirement accounts, to the extent legally allowable.

There are many more asset protection techniques for Austin, Texas, estate planners. Unfortunately, one blog is not enough to cover them all, which is why we will discuss additional options in the future.