When we meet with clients for their estate planning, I ask them about their goals. One of the most frequent answers I hear is that they want to ‘protect their estates.’ Of course, my next question is, from what? There are a variety of risks that estate planning can address when timely and properly undertaken. Read on for five ways to protect your estate from risks that can negatively impact the estate, and legacy, you intend to leave.

1. Protect your assets from long-term care costs.

One of the biggest concerns people have when they are planning their estates is that their assets will be consumed by their long-term care costs. Given the very high cost of such care, whether provided at home or in a long-term care facility, this is a valid concern. While many people think Medicare will cover long-term care costs, it does not. Advance planning to protect assets from spend down on long-term care costs often includes creating and funding an irrevocable trust. Depending on age, health and financial circumstances, purchasing a long-term care insurance policy which provides financial assistance for services like home care, assisted living, or nursing home care is another excellent way to protect a legacy from loss to long-term care costs.

2. Protect the inheritance you leave your beneficiaries

It is essential to thoughtfully decide how your assets will be distributed upon your passing. If you have minor children or beneficiaries with special needs, it is critical that assets not pass directly to these beneficiaries but instead pay into a Trust for them. A person with a disability who is receiving or may be entitled to receive public benefits may lose those benefits if they receive an inheritance.

Under the law, a minor is not legally able to receive assets. As such, if a minor is named as a beneficiary, a court appointed conservator will be required to collect the benefit on behalf of the minor. The conservator will need to manage the assets and report to the court on an annual basis – time consuming and expensive. Once a beneficiary turns age 18, the beneficiary is entitled to receive the asset – often another bad result.

Leaving an inheritance to beneficiaries in trust is often beneficial even if your beneficiaries are non-disabled adults. An inheritance that passes outright to beneficiaries is subject to the easy reach of their creditors such as a divorcing spouse, failed business, lawsuit, etc. Structuring your estate plan to leave the inheritance to your beneficiaries in trust will protect it from the easy reach of those creditors.

3. Protect your estate from avoidable costs and taxes

One key aim of estate planning is to minimize expenses and taxes that can diminish the value of your estate. Estate taxes can significantly reduce the assets you leave behind. Strategies like creating trusts, gifting assets during your lifetime, and making use of tax exemptions can help reduce the impact of estate taxes.

Furthermore, the way your assets are titled and structured can affect administrative costs. Proper titling of assets and careful planning can avoid probate and streamline the estate settlement process, saving both time and money for your beneficiaries.

4. Protect your unique assets

If you possess unique assets like a vacation home, valuable art, or collectibles, it’s crucial to incorporate them into your estate plan. These assets often hold sentimental value and can be a significant part of your legacy. The last thing most people want is to have their heirs fighting over their possessions following their deaths.

To protect and preserve these unique assets, your estate plan should clearly outline how they should be managed or distributed. You might consider creating a family trust to oversee the vacation home’s usage and maintenance, or specifying how your art collection should be appraised and distributed among your heirs.

By planning for these unique assets, you preserve your legacy by ensuring they continue to hold value and significance for your loved ones in the years to come.

5. Protect your privacy

Maintaining privacy is a fundamental aspect of estate planning. When you work with an estate planning attorney, you can establish measures to safeguard your personal and financial information.

One critical tool for privacy protection is the revocable living trust. Assets titled in a trust will avoid probate, a public court process that exposes your estate details to the public record. This means your assets can be distributed privately, without the need for public disclosure.

Additionally, working with professionals who understand the importance of confidentiality ensures that your affairs remain private during the estate settlement process. Protecting your privacy not only shields your financial matters from unnecessary public scrutiny but also preserves your family’s confidentiality during a potentially challenging time.

In conclusion, protecting your estate and preserving your legacy involves a comprehensive estate plan that considers various factors, from minimizing long-term care costs and taxes, safeguarding the inheritance you will leave, and planning for your unique assets. Working with an experienced estate planning attorney will help you tailor a plan that aligns with your specific goals and priorities, ensuring that your legacy is preserved and passed on as intended.

Attorney Suzanne R. Sayward is a partner with the Dedham law firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit our website at www.ssbllc.com or call 781/461-1020.

October, 2023

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