Protect Your Assets

One of the top questions I get is, “How do I protect the inheritance I’m going to leave to my heirs or loved ones?” It’s a great question because it shows you’re thinking beyond just fundamental or basic estate planning. Instead, you are thinking about a legacy plan. With a legacy plan, asset protection is often used to ensure that what’s left to your loved ones isn’t squandered by future divorce, creditors, lawsuits, bankruptcy, spendthrift habits, addictions, etc. Asset protection is also used when a client is trying to protect part of the estate from being all spent on nursing home costs. 

Often times, asset protection planning involves the use of a trust. Introducing the word “trust” immediately turns some folks off, thinking that asset protection planning must be too complicated. To be sure, a trust is not as straightforward as a simple will, but the planning is not overly complex either. You may have heard me say this (many times), but every plan is different—it depends on your family, the issue(s) involved, the types of assets you own, whether you have property in multiple states, and several other factors. 

A few years ago, I set up a trust for a client (“Rick”) who was concerned about his daughter’s spending habits. Rick wanted to make sure his estate, which by this time primarily consisted of retirement accounts (IRAs), would pass to his daughter easily, and that she would benefit from it. Additionally, Rick wanted to ensure that when his daughter passed, there would be money left for the grandkids. I told him that a trust would work great, because it would allow his daughter to get an annual distribution, keep the funds tax-deferred for her lifetime, and provide enough via the “stretch IRA” concept to create the multi-generational legacy he wanted—that is, it would provide enough for the daughter, grandkids, and maybe even great-grandkids.

I remember Rick initially rejecting the plan. His parents had a simple will, and he had one too. Why should he do anything different, since it worked out fine with his parents’ estate? A trust would make things too complex, he said. But the more we talked, the more open-minded he became. At the end of the day, Rick was appreciative of the new ideas. I reminded him that times were different today than they were 20 years ago.

I know it wasn’t easy for Rick, and during our meetings he asked me several times if we really needed the trust. By the way, that kind of questioning was, and is, OK with me. I want to make sure each client is comfortable with the plan we are preparing. It really is a team effort. To that end, we circled back to Rick’s original concerns and I showed him the best, most durable solution was a trust. It took some time, but he was a big believer in the plan by the time we were done.

Have you thought about protecting your assets or building a legacy that will last through the grandkids, but haven’t taken the opportunity to sit down with me to discuss? Now is the time to book a consultation and discuss your plan. Just give us a call at (215) 706-0200 to schedule your consultation. Or you can email me directly at for any questions.