As I mentioned in a post about a year ago, estate planning and asset protection planning are not the same. They are related. It is often advisable to focus on them at the same time. But they involve different considerations.
Here is one example. A general rule for estate planning is to divide assets equally between spouses. This is usually advisable from a federal estate tax standpoint. But this may or may not be advisable from an asset protection standpoint. If one spouse is in a high risk occupation, it may be better to have more assets titled in the name of the other spouse. A family limited liability company might also be a good option.
Another example is holding assets in joint names. This is frequently used for convenience and to avoid probate. It is often not optimal, however, from an asset protection standpoint.
The key point to remember is that each client’s situation must be examined individually. Simply having a will, trust or other estate planning documents in place does not necessarily mean you are adequately protecting any of your assets.