Protecting Your Estate from Creditors
A big part of estate planning is protecting your assets, of course. One of the things you will clarify in your will is how your assets will be distributed, and how to avoid Probate.
Understanding Probate Assets
Probate assets are assets for which there are no designated beneficiaries. A 401(k) or an IRA, or any other kind of retirement plan, will have you complete beneficiary designation forms – and therefore these are not probate assets. (Definitely complete those beneficiary designation forms, though, to avoid confusion and potential confusion over asset management.)
You may have creditors at the time of your passing. You may have, say, bills from a nursing home, a hospital, credit card bills, or even people who have filed claims against you in a court of law. Usually, only your estate can pay those creditors.
With that in mind, you want your retirement assets to go to your beneficiaries, not to your creditors.
This is why those beneficiary designation forms are so important.
The Importance of Beneficiary Designation
If your estate is $50,000, but you owe medical providers $75,000, these claimants can only take their pay from the $50,000 in your estate.
You may have $400,000 in your IRA and 401(k), but those medical providers cannot touch those retirement funds, because they have already been designated to go to your beneficiaries.
Answers To Estate, Probate, Trust and Will Questions
There are many aspects of estate planning to take into account, and we here at Donnellon, Donnellon, & Miller can assist you with all of the considerations – both those that concern you right now, and others that you may not have thought about. 513-891-7087 is our number, and we are available to talk with you about any of your will, trust, or estate needs.