By: Barry E. Haimo, Esq.
January 20, 2022
If you’ve begun planning your estate, you know the importance of protecting your hard-earned assets during and after your lifetime. But the unfortunate reality is that without the proper protection from lawsuits, your estate and heirs could be at risk.
There are many reasons why an estate might end up in a legal battle, so it’s important to arm yourself with the right defenses.
Why Would I Need Protection from Lawsuits?
Although you can get sued at any time, it’s especially common for a person’s estate to get tied up in the courts after their death for familial reasons. Taxes, probate, and creditors often pose a risk to your estate, but many people also forget about their heirs as a source of conflict.
When beneficiaries disagree over an estate, it can lead to lengthy and sometimes public court battles, loss of assets due to attorney fees, and family unrest. That’s why it’s imperative to lawsuit-proof your estate plan while you’re still alive.
Here are five ways to lawsuit-proof your estate plan and protect your assets.
1. Consider an Asset Protection Trust
Even if you currently have a last will and testament, you may want to consider an asset protection trust. This type of trust can offer you stronger protection from lawsuits.
It also helps minimize probate and is a great defense against creditors. There are multiple types of asset protection trusts to explore, including irrevocable and revocable trusts.
2. Get Specific
When it comes to expressing your wishes in regard to your estate and assets, you want to be as specific as possible. Leaving room for interpretation in a will can always cause confusion – and possibly impending lawsuits.
Rather than just asking that your assets be divided up among your heirs, take the time to specify who inherits what. Or consider making some gifts during your lifetime. You can even notify family before you pass away about who will get what when that time comes.
Be sure you also are aware of all your assets and update your estate plan regularly to reflect any changes in your estate, your beneficiaries, or your fiduciaries.
3. Separate Personal from Business
If you have a business and it is a sole proprietorship or a general partnership, your personal and business assets are lumped together. In the event of a business-related dispute, you could risk losing all of your personal assets, too, if you don’t take precautions.
What’s the solution?
You could transfer your business with a contract to another person during your lifetime, avoiding any conflicts around passing on the business in your will. Or you could consider one of the following business entities instead, to help separate your assets:
- Limited Liability Company (LLC)
- Limited Partnership
Not sure which business type is best for you? Download our free Business Entity Comparison Chart.
4. Appoint a Professional Personal Representative
Although the obvious choice for an estate personal representative is a spouse or child, hiring a professional (and unbiased) personal representative can help mitigate family conflict. While it is a more costly option, it is worth it if it keeps your estate out of the courts.
Alternatively, you could consider appointing co-personal representatives or co-trustees. By appointing multiple family members to manage your estate, you are avoiding any favoritism or bias that could occur if one family member is in charge.
5. Hire an Experienced Estate Attorney
Being proactive is one of the best things you can do to protect your estate against lawsuits. That means hiring an experienced attorney who specializes in estate planning and asset protection. With the right support, you can select which strategies are the right choice for you and your estate.
At Haimo Law, we can help safeguard your estate plan against lawsuits, leaving you feeling accomplished and confident. Avoid significant taxes, chaos, court, costs, and conflict when you call us today at 954-228-3369.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
YOU ARE NOT OUR CLIENT UNLESS WE EXECUTE A WRITTEN AGREEMENT TO THAT EFFECT. MOREOVER, THE INFORMATION CONTAINED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. EACH SITUATION IS HIGHLY FACT SPECIFIC AND EXCEPTIONS OFTEN EXIST TO GENERAL RULES. DO NOT RELY ON THIS INFORMATION, AS A CONSULTATION TO UNDERSTAND THE FACTS AND THE CLIENT’S NEEDS AND GOALS IS NECESSARY. ULTIMATELY WE MUST BE RETAINED TO PROVIDE LEGAL ADVICE AND REPRESENTATION. THIS INFORMATION IS PROVIDED AS A COURTESY AND, ACCORDINGLY, DOES NOT CONSTITUTE LEGAL ADVICE.