What Is Asset Protection?
Asset protection ensures the hard-earned assets you have built over your lifetime are not susceptible to being lost to over-taxation, the high cost of long-term care (including nursing homes), unexpected lawsuits or divorce. It’s about making sure that the things you own, like your savings or your house, are kept safe from things that could try to take them away while you are alive so that after your death, they are available for your loved ones.
Planning for tax protection is very different from planning to protect from other creditors and is best left to tax experts. The federal estate tax credit is currently $13,610,000 (2024), possibly higher for married couples, and therefore tax planning is not a major concern to most people.
I am attorney Angela Davis-Morris. At Davis-Morris Law Firm, I can help you safeguard your lifetime of assets from being dissipated by lawsuits, nursing homes and divorce. Call today to discuss your specific concerns.
Should Planning For Long-Term Care Costs Be Part Of My Estate Plan?
You have worked hard to earn and save assets over your lifetime. You should be able to pass them along to your family members or other loved ones. But, if you need long-term care, your savings can be gone in a matter of months. Long-term care is expensive and your assets can be quickly depleted unless you take the proper steps to protect them. Asset protection planning for long-term care (or Medicaid Planning) can be one of the most important parts of your estate plan.
Asset Protection FAQs
You probably have many questions about how asset protection works in Mississippi. Here I have provided some general answers to commonly asked questions.
How can I protect my assets from lawsuits or creditors?
Popular options for shielding assets from court verdicts and creditor claims include setting up an irrevocable trust, family limited partnership (FLP) or limited liability company (LLC). These estate planning tools work by taking ownership of valuable assets while you still get to use them during your lifetime and transfer them to the people of your choice. Because they officially belong to the other entity and not you, they are generally exempt from lawsuit verdicts and debt collection actions.
How can estate planning help minimize estate taxes?
While Mississippi does not impose a tax on estates after a resident dies, the federal estate tax still applies. However, the law exempts the value of estates up to a certain threshold, which is $13.61 million for individuals for 2024. If your estate is worth more than the exemption, trusts such as an irrevocable trust can protect that excess from estate and gift taxes.
What happens to my assets if I become incapacitated?
If you ever become unable to manage your own financial affairs due to illness or injury, having someone designated as your financial power of attorney can ensure that your assets continue to be managed properly. The power of attorney steps in if you become mentally incapacitated and handles your financial matters in your best interests. You can choose any competent adult to be your power of attorney, but you should consider choosing someone you trust who is experienced with money matters and lives close to you.
How can I ensure my children are taken care of after I’m gone?
While every parent hopes they live long enough for their children to grow up and become independent, that is not always how it goes. While your children are still minors, you can use your estate plan to designate guardians to raise them if you and your co-parent are gone. And if you have a child with special needs, a special needs trust can help make sure they continue to have the resources they need to thrive.
What is the best way to pass on assets to my heirs?
This depends on the details of your life. For some people, a simple will is enough to pass on their estate. Other people would benefit from a trust. Your plan should reflect your wishes and the nature of your estate, as well as reasonably priced. Discussing your needs with your estate planning attorney is the best way of coming away with the ideal plan for you.
Prepare For The Future Today
From my office in Hattiesburg, I help Mississippi residents prepare for these challenges, including protecting their assets as they look toward the future. Whether I’m assisting you in building a basic estate plan or navigating a long-term care asset protection plan, I can answer your questions, provide guidance, and help you feel confident you are prepared and that your assets are protected and available to pass on to your loved ones.
To schedule an initial consultation and begin taking the first steps toward Medicaid eligibility, call at 601-602-8874 or reach out to my firm online.