While people of every age and background can benefit from the basic tools of estate planning, certain families and business owners can benefit from more advanced strategies. There are many different planning strategies today that can help to enhance your asset protection and minimize your estate and income taxes.
In order to make the most of available estate planning strategies, you have to know your starting point. Gathering an inventory of all assets and liabilities is the jumping off point for your meeting with a Michigan estate planning lawyer. Matching these assets with your primary goals for estate planning- such as adding privacy, protecting yourself from the cost of long term care, minimizing taxes, and streamlining the distribution of assets on your death, will help to guide the next steps.
One of the easiest forms of protection to consider is forming a limited liability company. An LLC is a business entity that provides a somewhat more flexible administrative structure and asset protection when compared with a corporation. These are ideal structures for any business owner as well as people who have investment properties and rental properties. For example, if you are renting out a home that is held personally in your name, then you are personally liable for any issues arising from that property. An LLC is a very powerful tool to shield yourself and your family.
Another remarkable tool is an Asset Protection Trust. An Asset Protection Trust can be used to shield yourself and your family from lawsuits as well as the increasingly high cost of long-term care and nursing home care. Within the next 5 years, the average cost for 1 bed in a shared room in a Michigan nursing home is projected to be well above $10,000 per month. And that’s the average. The cost of long-term care is one of, if not the single biggest, threat to the life savings and assets of American seniors today.
Finally, while it’s not the issue it once was, some people are still concerned with the impact of the estate tax. A charitable remainder trust can also be used to create an income stream from a liquid asset, while minimizing or deferring income taxes. Estate tax planning can also be accomplished with life insurance using your exemption and other tools, such as delayed access and creditor protection. To decide which of any of these advanced estate planning strategies are recommended for you, schedule a consultation with an experienced Michigan estate planning law firm today.