Who doesn’t dream of an enduring marriage, plenty of money, physical and mental health well into your 80s, and a generous inheritance to leave to happy, stable adult children who all get along when you die at a ripe old age? Wouldn’t that be nice? Maybe those dreams will come true for you, but are you willing to take the risk?
We know it’s hard to think about the bad things that can happen as you get older, but we’re here to help you plan for the possibility that things will go wrong. Estate Planning attorneys often boil these challenges down to the four Ds: Divorce, Debt, Disability, and Death. We all know the last D is going to happen eventually, but it’s what we do now to plan for the other three that can protect our families from potential disaster.
Divorce: Protect Your Estate From Exes
Getting divorced is not the worst thing in the world, and for some couples, it’s actually the best thing, but divorce and remarriage can complicate Estate Plans. Your property and assets will be divided when you finalize the split, but there are a few additional steps you should take to protect your future income and any assets you want to leave to your children.
- Remove your ex as a beneficiary from insurance policies, retirement accounts, and Trusts.
- Set up a new Trust and fund it with assets you want to go to your children. This will prevent the children of a potential second spouse from having a claim on the money.
- Think about your children’s ex-spouses. Your own divorce is not the only concern; if your adult children get married and later divorced, their exes could have a claim on the inheritance you have left them.
Trusts are a powerful tool to safeguard assets in the event of divorce.
Debt: Don’t Let Creditors Tap Into Your Assets
Putting assets in Trust can also protect them from certain creditors. You should discuss Trusts as a tool to protect your personal assets with an Estate Planning attorney, especially if you own a business.
It might seem like an easy Estate Planning solution to simply add your adult children to your bank accounts and property titles. That way, when you die, they get the assets without delay or the need for probate. However, if one of your children gets sued—say after a car accident—or gets divorced, those assets are fair game. This can be avoided by holding assets in Trust to be passed on to your children according to your instructions.
Disability: Planning for Long-Term Challenges
Planning for disability is probably the most important thing you can do, regardless of your age. Accidents and debilitating medical conditions can strike at any time. People who experience the following types of trauma and illness can become incapable of making decisions and caring for themselves:
- Catastrophic car accident
- Mental illness
- Brain tumor
- Spinal cord injury
- Alzheimer’s disease or dementia
Having certain documents in place, such as Powers of Attorney, can make sure someone has the authority to make decisions on your behalf. In addition, an Asset Protection Trust can ensure that all of your hard-earned savings—including what you dream about passing on to your children—is not all spent on your care.
Death: It Happens to the Best of Us
At the core of that happy dream we mentioned at the beginning of this article is a long life. But we can’t predict our own deaths, so it’s imperative that you have a Will and that you have done some Trust planning, no matter how far off the Grim Reaper seems to be. This might seem like a lot of gloom and doom, but the reality is, the more you plan for the tough things life might bring, the less disastrous these things will be if they happen.
Trusts Are the Key—We Can Help
The key to avoiding the fifth D: Disaster is smart Trust planning. You have several options when it comes to Trusts. Our Elder Law & Estate Planning team would be happy to discuss them with you. Depending on your age, wealth, heirs, and a variety of other factors, we can design a custom Estate Plan that takes the bite out of the Four Ds. Reach out to our team today. With five offices in Texas and Arkansas, we’re never far away.