New Jersey residents who have been fortunate enough to amass some wealth often will want to be sure that as much of that fortune as possible gets passed down to their loved ones.
In order to accomplish this, the family may need to consider detailed asset protection planning.
Asset protection planning is a delicate balancing act, and this is one reason why an experienced legal professional with a financial background may be a helpful resource.
Basically, though, not taking any steps to protect assets could mean that wealth gets lost to taxes. The government may also try to recoup assets in order to repay various programs and benefits. An heir’s private creditors may also threaten the family’s fortune.
On the other hand, being too aggressive or not properly planning could lead to legal trouble, including government penalties or lawsuits from creditors seeking to set aside a fraudulent conveyance.
People who may have to pay death taxes or other taxes should protect assets
There are legal ways in which New Jersey residents can save money on taxes. For example, certain types of trusts come with tax advantages.
The end result of this type of asset protection planning is that loved ones will be able to receive a larger share of a family’s wealth.
Asset protection plans may help loved ones who have special needs
Many families include people with special needs. Oftentimes, these and other relatives rely on government benefits to cover medical care and other expenses. The problem is that these programs frequently have income and asset caps.
It can be difficult for these people both to accept a gift or inheritance and keep their benefits. However, a special needs trust or other asset protection techniques can help solve this problem.
A family may need to protect its legacy from the creditors of loved ones
In other cases, the family may be concerned that their loved ones will run up debts and that creditors would be able to take their loved one’s gifts or bequests.
In addition to making personal or professional financial mistakes, a family member could even wind up in debt to a hostile former spouse. An asset protection plan can stave off the worst financial consequences in these situations.