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Home > Blog > Estate Planning > Asset Protection V. Estate Planning: What Is The Difference?

Asset Protection V. Estate Planning: What Is The Difference?


Asset Protection

Asset protection refers to the process of shielding assets (such as real property, stocks, bonds, business interests, etc) from creditor claims, levies, liens, and seizures. Developing a plan with an experienced law firm will help to ensure your assets are covered in a smart and – most importantly – legal manner so problems don’t arise down the road. Asset protection plans must be laid out well before any potential liability arises, to avoid claims that your property or funds were fraudulently transferred.

Some asset protection tools include irrevocable trusts, LLCs and limited partnerships, and insurance policies. The main advantage behind these strategies is that hard-earned assets that you want to keep for your family and heirs remain protected.

The main disadvantage? Protecting assets long-term from the reach of creditors can prevent access in the short-term. An irrevocable trust, for example, states just that — it can’t be revoked for immediate use if plans change.

Estate Planning

Estate planning involves managing how an individual’s assets will be maintained or distributed after one’s death. It also considers an individual’s property ownership and financial obligations in the event that they pass away or become incapacitated.

Assets typically included in estate planning may be:

  • Homes and other real property
  • Vehicles and boats
  • Stocks, bonds, and other investment accounts
  • Pension funds
  • Life insurance
  • Valuable items such as jewelry and artwork
  • Liabilities and debt

Estate planning may also include appointing a trusted family member or other individual to make medical or financial decisions on your behalf in a Power of Attorney (POA) role. This person may also be allowed to open and close financial accounts on your behalf, eliminating the cost and hassle associated with the probate process and potential conservatorship issues.

Careful estate planning considers your needs during your lifetime as well as addressing the disposition of your property after you are gone. Your goal is to make sure your assets and valuables pass on as you intend, while minimizing the burdens caused by estate taxes and debt.

The advantages of effective estate planning are clear: your financial assets, home, and other treasured property can carry on to your family in the best way possible.

Some tools you would utilize in asset protection (such as LLCs and insurance policies), however,  won’t make sense as part of an estate plan. Also, a revocable trust that might work for future estate planning could be accessible to creditors during your lifetime, making it a poor asset protection tool.

Estate planning also differs from other asset protection strategies because it revolves around death or incapacity of yourself or a loved one. This is uncomfortable for anybody to think about, much less plan for. It helps to have the guidance of attorneys that have been there for countless other families when planning for these life events.

Don’t wait until it is too late to protect your financial resources and plan for your family’s future. Cavallo & Cavallo has decades’ worth of experience providing trusted asset protection and estate planning guidance to people in our community. Let us help you review your best options and put the proper legal documents in place. Reach out and call or contact our Bronx & Westchester estate planning attorneys online to request a consultation in our office today.



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