Don't Just Make Money— Keep It: Tips for Protecting Your Money with Law Mother (Pamela Maass-Garrett)

Estate planning expert Pamela Maass-Garrett stresses the importance of proper asset protection to give loved ones the best possible future. Here's how different trusts and strategies can help.

Utilize revocable living trusts to avoid probate and protect real estate assets

Maass-Garrett insists on using a revocable living trust rather than putting the house in children's names to protect real estate assets. Placing real estate in a revocable living trust allows for properties to be passed on to beneficiaries smoothly. This strategy avoids probate and prevents capital gains tax issues that arise when adding children directly to the property title while the owner is still alive.

If the property's title is added to the children while the owner is alive to evade probate, this creates a capital gains tax issue; as the property's value increases, children inherit the tax burden based on the gain from when they were added to the title to when the owner passes away. A trust circumvents this, meaning no probate and no capital gains taxes.

For most people, a revocable living trust established during their lifetime suffices, allowing them to retain control over their assets and determine their distribution after death.

Leverage irrevocable trusts for high-net-worth individuals to minimize estate taxes

Irrevocable trusts are a key tool for high-net-worth individuals, aiming to diminish estate taxes posthumously. These trusts are immutable once established, appropriate for individuals seeking to lessen estate taxes or who are in high-risk professions and are anxious about legal actions against their estate.

Irrevocable trusts are especially suggested for those with assets they no longer wish to control or who have a net worth that exceeds certain thresholds, specifically around $13 million in assets. These individuals should consider irrevocable trusts to help reduce their estate tax burden.

Employ lifetime asset protection trusts to shield inheritances from future creditors and divorces

A lifetime asset protection tr ...

It's crucial to organize and document your financial information effectively. Not only does it help you to keep track of your finances, but it also ensures that your loved ones can easily manage your affairs if something were to happen to you.

Maintain a centralized record of all assets, accounts, and important documents

One common mistake people make is the lack of a centralized list of their assets and accounts.

Keeping a physical or digital file with the key information about your financial accounts, real estate deeds, insurance policies, and other crucial documents makes it much easier for your loved ones to locate and manage your affairs if something were to happen to you.

A simple way to start organizing is to grab a file folder and store the first pages of essential documents like real estate deeds, life insurance policies, bank account details, and investment accounts. It’s important to keep this information in one physical place—and to make sure someone trustworthy knows where it is.

Utilize password managers to securely store and share digital account information

For those comfortable with digital solutions, password managers are a notable tool for organizing online information.

Password managers like LastPass ...

Pamela Maass-Garrett and Nicole Lapin discuss strategies for protecting assets while navigating legal complexities and ensuring adequate insurance coverage.

Beware of fraudulent conveyance when transferring assets to avoid legitimate claims

It’s illegal to move assets with the intent to defraud creditors, Maass-Garrett explains. This act, known as fraudulent conveyance, carries severe legal penalties if done to avoid paying valid debts or judgments resulting from legitimate grievances.

Transferring assets with the intent to defraud creditors can be considered fraudulent conveyance, which carries severe legal penalties.

Maass-Garrett gives an example of a woman who caused an accident, then transferred the deed to her house to her brother for just $1, which signaled fraudulent conveyance. While protecting assets before any harm occurs is legal, any asset transfers made after an incident can raise suspicion and lead to accusations of fraudulent transfer.

In discussing whether fraudulent conveyance could happen inadvertently, Maass-Garrett acknowledges legitimate reasons for transferring assets even amidst litigation. However, it remains a fact-specific situation subject to judicial discretion. She emphasizes the need for expert advice from an attorney in such circumstances, transparency, and effective communication during litigation to consider how such a transfer might appear to a jury.

Review insurance policy exclusions to ensure adequate coverage

Many individuals misunderstand their insurance policies, assuming broad protection. However, Maass-Garrett points out the critical need to carefully review the terms to ensure that they truly offer the coverage expected, placing special emphasis on the policy exclusions.

Many people mistakenly believe their umbrella or other insurance policies provide broad protection, but the exclusions in the fine print can leave significant gaps.

Before delving into trusts or other asset protection vehicles ...

In light of recent celebrity news, financial and legal experts weigh in on how stars can secure their assets and protect their legacies for their families.

Ensure appropriate estate planning documents and life insurance are in place when starting a family

In the case of Megan Fox and Machine Gun Kelly, they're expecting a child, and Pamela Maass-Garrett highlights the necessity of having proper planning in place. Incapacity planning documents should be prepared, which consider end-of-life decisions and who should control matters if something occurs during childbirth.

For high-profile couples like Megan Fox and Machine Gun Kelly who are expecting a child, it's important they have advance directives, guardianship arrangements, and adequate life insurance coverage to protect their family's financial future.

Advance directives and guardianship documents are crucial to specify who will make financial and medical decisions if one becomes unable to do so. Contemplating wills and life insurance is particularly imperative when children are involved. Both partners should implement estate plans, acknowledging the financial intentions for each other if tragically one were to pass away.

Use prenuptial agreements to safeguard personal assets before marriage

Considering the wealth involved with high-net-worth individuals like Taylor Swift, it is sensible to establish a prenuptial agreement before marriage to clearly outline asset division in case of a divorce.

Given her substantial wealth, it would be advisable for someone like Taylor Swift to have a prenuptial agreement in place before marriage to clearly define how assets would be divided in the event of a divorce.

Prenuptial agreements provide financial transparency and can prevent future legal conflicts, allowing partners to set their own provisions rather than relying on default state laws. They are beneficial for ensuring a mutual understanding of finances between partners, especially where there is a significant wealth disparity.

Vigilantly monitor for potential conflicts of ...