When people come into my workshop, the first thing I ask is, “What do you want to learn?” The response is almost immediately, “I want to learn how to protect my assets.” Ninety nine out of 100 lawyers would stop there and say, OK, let me show you the way. But a Lawyers with Purpose attorney knows to ask the next question: “What are you afraid of losing your assets to?”
That's when the answers start to vary. Predominantly the No. 1 answer is that people are afraid of “the government.” Interestingly, they're not really sure what this means, but typically it tends to relate to taxes or probate. Often, they're not even sure what taxes they're concerned about or the difference between income taxes, estate taxes or gift taxes. They're just afraid of taxes overall.
Secondly, they're afraid of losing everything to long-term care costs or Medicaid. We know Medicaid doesn't take any of their money, but some of it may have to be applied to the cost of care before Medicaid will pay for their long-term care costs.
The third most common response is family members. Most people who are concerned about family members have family members they are afraid will challenge their estate or cause havoc for the remaining family members. We as attorneys know that it's the family members we don't anticipate who cause the greatest damage. Finally, clients want to protect from lawsuits. They are keenly aware of the possibility of lawsuits and they want to make sure that everything they've worked for is not lost to one.
As we analyze each of these separately, it becomes clear why people are so confused. They are trying to distinguish between estate planning, tax planning, asset protection planning, Medicaid or benefits planning, and general asset protection strategies. To keep it simple, at Lawyers with Purpose we teach four layers of planning.
First, estate planning is ensuring that what you have gets to whom you want, when you want, the way you want, without unnecessary cost or delay.
Second, asset protection planning is ensuring that your assets are protected from predators and creditors. The key distinction we train our members on is between obtaining asset protection after death, by way of post-death trust planning, and asset protection while alive by way of the IPUG™ protection trust. These trusts ensure that clients are able to create them, control them, change them, and even benefit from them, without the threat of being lost to predators, creditors, nursing homes, family or any other potential threat.
The third level of planning is needs-based benefits planning. This often includes Medicaid benefits, Veteran's benefits, and other needs-based benefits available to pay for a client's care if needed. Planning for these needs-based benefits is a level above and beyond general asset protection planning, but it is usually distinguishable and identified when using the LWP™ client enrollment system and documentation creation system.
Finally, there is tax planning. This only applies to two-tenths of one percent of America, but it's the No. 1 reason why people want to protect their assets. So, while it is important and necessary to some, the vast majority (99.8 percent) really don't need it. That's why the Lawyers with Purpose training on its TLC™ estate planning process is essential to ensure clients are properly educated on how to achieve the estate plan most meaningful to them.
If you want to learn more about Lawyers With Purpose consider being in the room with us and our members and experience it first hand! We'll be in Phoenix, AZ, October 19th – 23rd! Click here to review the full agenda. If you register by August 28th you can still snag a seat at Early Bird pricing! This is THE estate and elder law event you DO NOT want to miss.
David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center
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