FAQ: ESTATE PLANNING (PART 2 OF 2)

If you’re like most estate planning clients, you have lots of questions. Here are answers to some of the most frequently asked estate planning questions.

What is asset protection?

“Asset protection” means assets cannot not be taken by a creditor in a lawsuit. You can provide asset protection for the assets you pass to your beneficiaries by passing them in a carefully structured trust, as opposed to outright.

Do I need life insurance?

You may need life insurance if you:

Have loved ones who are dependent upon your income
Want to create an estate
Want to equalize an estate
Need to pay federal estate taxes
Need to fund a buy-sell agreement
How do I pay for a nursing home?

If you need nursing home care, there are four ways to pay for it:

Private pay
Long term care insurance
Medicare (extremely limited)
Medicaid (if you qualify)
Pre-planning is highly recommended. The earlier you plan for nursing home care, more options and lower fees will be available.

My sister and I want to set up a small business. What legal entity should we use?

You and your sister should consult with a qualified estate planning attorney about your specific situation. But, in general, the limited liability company (LLC) is a good entity for a small business.

The LLC has the liability protection of the corporation (without the double taxation.) And, the LLC has the tax simplicity of a partnership.

In addition, it is inexpensive to set up and to run.

What is incapacity planning?

Incapacity planning (aka “disability planning”) provides for your care and management of your finances should you become incapacitated and unable to take care of these matters yourself.

If you have further estate planning questions, read FAQ: Estate Planning (Part 1) and consult with a qualified estate planning attorneys.