You need more than a last will and testament to protect your estate in Georgia and ensure that your beneficiaries receive their inheritance. If you die with debt, your creditors can sue your estate to receive what is owed to them. The size and value of your estate can diminish significantly if you happen to owe a substantial amount of money to your creditors. Even though it would be advantageous for you to pay off what you owe, there are many reasons why you may not.
Learn how to protect your estate from your creditors to keep your debts from diminishing the size of your loved ones’ inheritances.
Place life insurance into irrevocable trusts
Your life insurance policies are creditor-proof until the day you die and they are distributed to your beneficiaries. To keep creditors from touching them, you should place them into an irrevocable life insurance trust that includes a spendthrift clause. This ensures the funds go directly to your beneficiaries and any other parties you designate. The only way your creditors can touch the funds in your irrevocable life insurance trust is if you specify it in the provisions.
Properly title your assets
You may not feel like designating specific beneficiaries to inherit your retirement accounts, life insurance and other assets. But if you do not name any heirs for those accounts, they will end up in probate court for a judge to decide. When your assets pass through probate court, they become public, and creditors can file lawsuits to collect on your debts. When there are lawsuits against assets and accounts that are not properly titled, the courts will use them to pay your creditors first. The courts will then pass any assets that remain on to your family in accordance with intestate successions laws. You can also avoid this by establishing joint ownership of your accounts.
Estate planning may seem like a complicated process, especially when you are trying to include measures to protect your estate and loved ones’ inheritances. If you need assistance with making your estate and assets safe from creditors, you should speak to an attorney for guidance.