Elder Law Report
Elder Law Report
Protecting Your Legacy from Creditors and Lawsuits: Strategies for Securing Your Financial Legacy
Have you ever worried about what would happen to your hard-earned assets if you faced a lawsuit or creditor claims? The truth might surprise you.
Attorney Jordan McIntyre begins with a reality check that makes many clients uncomfortable: there's no such thing as a litigation-proof life or estate plan. However, that doesn't mean you're powerless. Through strategic planning, you can create multiple layers of protection that significantly reduce your risk exposure while ensuring your wealth passes according to your wishes.
Jane Deere-Wester and Jordan explore four powerful protection strategies that work together like Russian nesting dolls to shield your assets. They discuss how properly structured trusts can discourage contests through specific provisions, while beneficiary designations offer a simple yet effective tool anyone can implement today without legal assistance. Jane shares a personal cautionary tale of discovering her ex-husband remained as a beneficiary on an account years after their divorce—a common oversight with potentially serious consequences.
For business owners and real estate investors, placing assets within properly structured LLCs provides crucial separation between personal and business liabilities. Taking this protection further by incorporating these entities into your estate plan creates multiple barriers against potential claims. We also tackle the often-uncomfortable subject of prenuptial agreements, which have become increasingly important in today's world of blended families and multiple marriages.
The podcast wraps up with practical advice on implementing these strategies and emphasizes that protecting your legacy isn't about overnight solutions but rather thoughtful planning that honors the lifetime of work you've invested in building your wealth.
Ready to create your own comprehensive asset protection plan? Reach out to our offices in Hendersonville, Shelby, or Charlotte, and let us help you secure your legacy for generations to come.
Hi there and welcome to our Elder Law Report. I'm Jane Dearwester with McIntyre Elder Law. I'm based in our Hendersonville office and I'm joined today by Jordan McIntyre in our Shelby office. Hi Jordan, hey Jane, about ways to protect your inheritance and your assets from creditors and lawsuits. I am in our litigation division.
Jane Dearwester:I do full-time litigation here for our firm across the state, and one question I get quite often from clients as we're doing their estate planning documents is I want you to put these documents together in such a way that nobody can ever contest it and nobody can ever have a litigation case coming out of my estate. And I apologize for kind of snickering while I'm saying that, but there is no such thing as a litigation proof estate plan or litigation-proof estate plan or a litigation-proof life right. So I want to come out and say that first, there's no hard and fast way to completely avoid litigation on the front end, because attorneys, we're creative. We come up with arguments you might not think about at the front end. So there is no such thing as a fail safe to absolutely avoid litigation. But of course in our process there are ways to make it harder to litigate. There are ways to make litigation less of a option or doesn't look like as good of an option, because we word our documents in such a way to be very clear. We always advise our clients to speak with their family members as they're going through the estate planning process so people know and hear directly from you hey, I just got my estate plan done. I want you to be my agent under the power of attorney when I go. I'm going to leave things split evenly between my children. Sometimes it's not so easy, right? Sometimes it's not so easy, but having that communication is key and can be a key factor in avoiding some litigation.
Jane Dearwester:So today, jordan and I are going to talk about really four different topics or areas that we use as estate planning attorneys and as litigators to help you avoid claims and litigation over inheritance and over your asset. So these four items I'll introduce briefly are trusts and estate planning documents, a good, solid estate plan having beneficiary designations. Third is business entity protection. So creating business entities as a way to protect your assets, and also number four prenuptial agreements as a way to protect your assets and also number four prenuptial agreements as a way between married couples to be very clear about properties that you may want to remain separate properties versus those properties that you may want to be considered marital properties. Prenups come in extremely handy and are very important, particularly in blended family dynamics, which we see a lot of these days. So I'll pause there and maybe let Jordan start out on number one, which is just about having a solid estate plan and or trust in place to again try to avoid litigation.
Jordan McIntyre:Yeah, so that was a great intro, jane. So, regardless of the route you try to go, typically at McIntyre Elder Law we're going to suggest getting out assets outside of probate or using some type of trust to do that. You want to have an estate plan in place that is difficult to challenge, right? We don't want to draft a document for you that has any type of ambiguous language. You want to have clear distributions to beneficiaries and then have individuals right that you trust to actually do that, whether it's a trustee or an executor. And, yeah, so with the Revocable Living Trust you're going to be able to avoid probate. You can control how and when assets are distributed, and here we're going to have no contest provisions within these documents to try to avoid litigation, meaning that if a beneficiary does not have a good faith basis to contest, I guess, the drafting of this document, then they're going to be cut out of that, and that can be in a will or a trust.
Jordan McIntyre:Additionally, you can use spendthrift provisions within trust if you want to try to protect a child from any losses they may have or bankruptcy right. Spendthrift provisions can make it more difficult for creditors to actually get assets from the trust. If you want to try to shield assets from any type of long-term care costs. Right, you're worried about qualifying for some type of benefit and then your estate being responsible for that. You can use irrevocable trust. Right, that's a way to shield assets. But essentially trust can give you control, flexibility and protection, and then we can try to avoid any type of litigation right by doing proper planning. So I think Jane's going to go in to talk about beneficiary designations and how that's pretty, you know foolproof to avoid litigation by just naming a beneficiary on an account. Yeah, thank you, jordan.
Jane Dearwester:That's true, that's a you know foolproof to avoid litigation by just naming a beneficiary on an account. Yeah, thank you, jordan. That's true, that's a perfect segue into beneficiary designations and let me be very clear, this is something you can do in most cases without the assistance of an attorney, so this is a freebie for you all listening, these are things you can take action and do today that you do not have to have an attorney involved. Call your bank account, your bank, your financial advisor. Make sure you have payable on death beneficiaries designated on every single one of your bank accounts. Let me use myself as an example.
Jane Dearwester:About a year ago, I found out that my ex-husband, who has been my ex-husband for over 10 years, was still listed as a payable on death beneficiary on one of my bank accounts. Of course, I've since changed that, but don't make the same mistake or some other business disillusion. We forget to go back and check all of our accounts, especially those accounts. We've had a really long time. We think we did it at the beginning, but now's as good a time as any. Go back and check those bank accounts. This includes checking savings, money market, iras, 401ks, life insurance. Check your beneficiaries and your life insurance.
Jane Dearwester:And, just to build on what Jordan was saying, in the estate planning and trust document planning, you can name your trust as the beneficiary of your life insurance policy. This is the way the Rockefeller family really built a lot of generational wealth was all the family members made their life insurance policies payable into that big Rockefeller trust and this is how they built on generational wealth. So, again, those beneficiary designations are so important. You don't have to pay anyone not an attorney or anyone else. You don't have to pay anyone not an attorney or anyone else to make those. The tough thing is you just have to prioritize it and make sure you actually do it. So that's a really easy one that you can do yourself, and I will ping back to Jordan to talk about creating business entities like LLCs or family limited partnerships to continue to shield assets or even your small, medium, large businesses.
Jordan McIntyre:Yeah. So using a limited liability company right, an LLC or even those professional limited liability corporations, is a great way to separate your personal wealth from any type of potential claims, right slips and falls on that property. Your entire estate could be at risk if you don't have it in some type of business. Additionally, here at McIntyre Elder Law we'll put LOCs into trust to keep everything aligned with the estate plan and avoid probate to ensure that this business is not halted. So if you have an LOC that goes through probate, it can really halt business operations and you want some type of succession plan in place.
Jordan McIntyre:Whether you have that within the operating agreement and the LLC, I would recommend that people put that LLC into the trust. They get additional liability protection like a Russian nesting doll, and then we can have some type of succession plan in place to ensure that the LLC is still run even after the owner passes right. So you just don't want to have assets in your own name. If you're worried about liability and you want to try to limit right, I guess how much people can recover from you If you have things in the LLC, they're only going to go after things in the LLC, not your personal assets. So if you've got multiple rental properties or small businesses, try to place them into those LLCs and maybe into a trust in order to limit your liability, and I think Jane's going to go into some prenup agreements. Those are incredibly important and they're not just for celebrities.
Jane Dearwester:Yeah, isn't that the truth? We were just talking about this before coming on to the meeting, the recording here and prenuptial agreements. We see more and more often people are on their second, third, fourth, 10th marriage and blended families are just such a common occurrence these days. Where someone has been married before Now they're getting remarried. They may have children from their past marriage and then new children with the current wife, and there are just so many issues. So we are not family law attorneys, but we work in conjunction with some excellent family law attorneys across Western North Carolina and all the way over to Charlotte. And we want to work in conjunction not only with your family law attorneys but also with other professionals like your accountants, your financial planners.
Jane Dearwester:But having that prenuptial agreement or, if you missed the boat on that, maybe a postnuptial agreement in place to determine what is separate property, what about that property you inherited from your grandfather? Do you want that to stay in your sole and separate name so you can pass it on to your biological children, or do you want your spouse to have a share in that? All these things are sometimes a tough discussion, but they are so much easier to have on the front end than on the back end in litigation. So setting yourself up with a prenuptial or postnuptial agreement is just pivotal to protecting your assets and securing your legacy, so that you know what's going to happen. I think with anything, with all of these four modalities, you're educating yourself in a way to know what's going to happen if you're either incapacitated or when you pass away.
Jane Dearwester:So the incapacitations and if the pass away is a win, capacitations and if the pass away is a win, right, we don't know of any way to keep anybody alive forever, so that is something all of us eventually are going to have to deal with. So having a solid estate plan in place and really educating yourself on what happens to stuff your business, your money, your real estate they're all treated a little bit differently, so just having the knowledge is incredibly empowering and we just encourage you all to take the next step after watching this video. Give our offices a call. We have offices in Hendersonville, shelby and Charlotte. We're here to serve our fellow North Carolinians and get our estate plans in place and help you secure your legacies for future generations. Anything else, jordan. Anything else I missed there.
Jordan McIntyre:You don't build this legacy overnight. You spend your entire life working, saving, investing, forming businesses, buying properties. So make sure you have protections in place, whether you do it yourself or through an attorney, to not let your legacy disappear. Litigation's not overnight, but you could lose everything pretty quickly if it's not protected, and there's always liability out there. You never know what's going to happen. So just make sure you protect yourself and we can do that for you here.
Jane Dearwester:That's right. That's right. Thanks again for joining us today. If you have any questions, please check out our website at wwwmcelderlawcom, and we look forward to assisting you and seeing y'all in the office soon. Thanks, jordan.
Jordan McIntyre:Thank you, Jane.
Jane Dearwester:Bye.