One way people in Colorado can ensure that their assets are protected after death is with estate planning. Estate planning does not just help to ensure that final wishes are honored, it is also a good way to make sure the deceased person’s assets are protected from creditors and litigation.
According to U.S. News & World Report, beneficiaries and relatives who may not be financially savvy enough to make smart decisions regarding their inheritance are often the recipients of funded trusts. Trusts often include the deceased person’s assets, such as real estate and life insurance benefits and are funded when the person who created them passes away.
It is important to establish asset protection trusts or funded trusts as soon as possible to prevent complications and issues with fraudulent transfers. The American Institute of Certified Public Accountants classifies fraudulent transfers as debts that are incurred and transfers that are made with the intent to defraud or dishonor creditor obligations. This includes attempting to transfer assets after a creditor has made a claim against them. The best way to ensure that all assets are fully protected is to create an irrevocable trust. Once an irrevocable trust is established, creditors and other entities are not able to make claims against it once the creator of it dies, because the deceased is no longer the owner of those assets.
With the right approach, estate planning can be a very powerful financial tool to protect one’s estate, their assets and their family in the future after their death. Trusts can be very beneficial for anyone who has beneficiaries and wants to protect their assets from a third-party, such as a creditor or ex-spouse.