AZ Asks Greg Herman-Giddens: How can your potential inheritance be protected?

Greg Herman-Giddens is an attorney and president of TrustCounsel in Chapel Hill, NC. He has been practicing law for 23 years. His areas of expertise are estate planning, probate trust administration, asset protection and taxation. He is a Board Certified Specialist in Estate Planning and Probate Law as well as a Certified Financial Planner.

Greg obtained a B.A. from the University of North Carolina Chapel Hill, his J.D. from Tulane Law School and an LL.M. in Estate Planning for the University Of Miami School Of Law. He can be reached at Email: info@trustcounselpa.com Website: www.trustcounselpa.com. His office is located at 205 Providence Road, Chapel Hill, NC 27514, Tel: (919) 493-6351 (Toll-free 800-201-0413).

AZ Asks Greg Herman-Giddens: How can your potential inheritance be protected?

There are many options to consider, but here are some to get you started: 

  • Have your relative set up a Testamentary Trust in their will or a living trust during their lifetime.
  • Set up an Inheritor’s Trust yourself, to be funded at your parent’s death.
  • This will allow interest to stay in the trust for your life with the interest being passed to your children at your death.
  • You can be the trustee.
  • The SpendThrift provision protects the assets of the Trust from your creditors.

What are some common mistakes to avoid when protecting your assets?

  • Don’t keep substantial assets in a joint account, even with a spouse.
  • Don’t own the car of an adult child, or keep him or her on your policy.
  • Don’t own vehicles jointly with your spouse.
  • Don’t go without sufficient umbrella liability insurance.
  • Don’t own rental real estate in your own name.
  • Don’t own real estate jointly with someone other than your spouse without a “buy-sell” agreement.
  • Don’t operate a business as a sole proprietor.
  • Don’t let other people operate any of your motor vehicles. If you do, make sure your insurance policy covers them.
  • Don’t co-sign or guarantee loans to family members or friends.
  • Don’t sign a joint income tax return with your spouse if you have any suspicion that he or she is not reporting all income, over-stating deductions, or is otherwise acting fraudulently or negligently.
  • Don’t serve on the board of a non-profit organization unless it has sufficient errors and omissions insurance for directors.
  • Don’t get married without a comprehensive prenuptial agreement.
  • Don’t leave property, including life insurance and retirement benefits, directly to minor children.
  • Don’t fail to consider leaving property to spouse and adult children in trust to protect from mismanagement, creditor, divorce, Medicaid, etc.

Do remember timing is crucial!  Plan for asset protection before any threat of lawsuit otherwise planning can be undone by virtue of the fraudulent conveyance laws.

For general informational purposes only. This information is not intended to be a substitute for specific individualized tax advice. Please note that individual situations can vary.

In order to protect your assets you will need the proper information and guidance from a professional. The above is some information to be discussed with your financial advisor and or attorney.

ZFA is not affiliated with Greg Herman-Giddens.

Answers from AZ

About Ann Zuraw

Ann Zuraw, the voice behind "Chicks, Chat and Change", is a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), and Certified Divorce Financial Analyst (CDFA™).If you have comments on this post contact Ann Zuraw

Free Email Updates

Enter your email address to receive free updates from Chicks, Chat and Change. (we respect your privacy)

, , , , , , , , , , , , , , , , , , , , ,