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Did you address your personal debts in your estate plan?

On Behalf of | Feb 20, 2022 | Estate Planning |

Many people think of estate planning as an unpleasant process. They may not like thinking about what happens if they become sick or suddenly die. They may also have to think about painful truths about their loved ones, like how addiction has affected one of their children.

All too often, people do the bare minimum when planning their estates and don’t really think about what they or their loved ones will need. If your estate plan only talks about your property and your children but not your debts, you may need to revisit your plan and expand it.

Everything you own is at risk because of your debt

If you have a significant credit card balance, you probably assume you will pay it off in full long before you die. However, if you die in a sudden freak accident next month, your loved ones will have to repay your entire credit card balance out of estate assets.

There’s also a risk that creditors could file civil lawsuits against you. They might ask for a lien against your house or even demand that the court garnish your wages.

Asset protection planning can be an important part of the estate planning process. It involves evaluating your debts and addressing them in your estate plan while simultaneously seeking to protect your property. Changing how you own your assets, such as moving them into a trust, can help protect them from creditor claims both now while you are alive and later after you die.

Thinking about your debts while estate planning will help ensure that you leave behind the right instructions and can pass some property on to your loved ones.

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