The Changing World of Estate Planning and Asset Protection

The world is certainly changing due to COVID-19, and that has created a lot of concern and anxiety for everybody. With experts telling us that the worst could be yet to come, many feel overwhelmed.

This dreadful pandemic is a wake-up call for those who have been thinking about putting their affairs in order; not just for estate planning like wills and trusts, but also documents for incapacity. A recent article in the Austin American-Statesman newspaper addressed the problem succinctly: people are literally scrambling to find attorneys who can help them put their vital planning instruments in place, but attorneys aren’t available. Many have suspended their office practice temporarily or they are overloaded with client assignments.

Here at Aspen Legacy Planning, we are taking appropriate measures to reduce the risk of spread according to the CDC guidelines, including physical distancing, but we are still open and working diligently to keep up with demand.

A big change in our activities is to limit in-person meetings. We are handling almost everything by communication technology. That means consultations, design meetings, exchanging drafts of documents by our client portal or email, even payment of fees … all online, by telephone and video conferencing. There is no need to meet in person in our offices. And that means you can accomplish everything from the comfort and security of your home, without taking the unnecessary risk of public exposure.

Also, we saw two primary needs to be addressed immediately:

Virtual Signings With Notarial Certificates

We did some research and confirmed that South Dakota recently approved virtual signing, witnessing and notarizing using communication technology, such as video conferencing. This is a big change and an unprecedented level of client service that helps many people during this current pandemic.

We now offer:

  • Consultations, design meetings, document review and explanation, all via telephone and/or video conferencing;
  • Final signing meetings and funding meetings, along with appropriate notarial certificates, using video conferencing with the GoToMeeting app.

Debt Relief Is Asset Protection

The government shutdown of the economy has resulted and will continue to result in closed businesses, lost jobs, lost income and dropped health insurance. This often leads to increased debt, medical and otherwise. Some people have been teetering on the brink of bankruptcy for some time due to their circumstances and are already pushed over the edge. For others, they might be getting by okay with severance pay or unemployment benefits, and they don’t need to consider this option right now, but they will in the not-too-distant future.

There is no shame in using the legal options available to address these desperate circumstances beyond your control, and waiting too long to get started will limit the options to protect more of your assets. Remember, debt relief is asset protection.

When utilizing bankruptcy protection, you are allowed to keep certain assets, even in a Chapter 7 liquidation. South Dakota law and other federal “non-bankruptcy” exemptions provide you with protection of the following property and income sources:

  • Your home equity (up to 1 acre in town & 160 rural acres)
  • Qualified retirement accounts up to $1 million plus
  • Health and life insurance benefits at various amounts
  • Public employee pensions
  • Various specified personal property and clothing
  • Unemployment and workers compensation
  • Wages owed 60 days before filing needed for support of family
  • Food and fuel to last 1 year
  • Health aids professionally prescribed
  • Burial plots
  • Social Security, Civil Service and Veterans benefits
  • “Wild card” exemption of $5,000, to $7,000 for head of family

If you are married and filing together then it is usually possible to double the amount of state law exemptions.

Chapter 7 Bankruptcy Services

Chapter 7 wipes out your debts and gives you a fresh financial start, however there are some rules: your income must be less than the median income for your state, and if you have had another bankruptcy case dismissed within the last 180 days, you will not qualify. Also, if you owe child support, alimony, outstanding student loans or unpaid taxes, you will still be responsible for such obligations.

Benefits of Chapter 7 bankruptcy include:

  • Fresh financial start
  • Protection against collection efforts
  • Protection against wage garnishment
  • Keep the wages you earn and property you acquire after filing
  • No minimum debt requirements
  • Cases are commonly discharged in about 3-6 months

Chapter 13 Bankruptcy Services

With this option, you create a repayment plan for your creditors that covers some or all of your debts. Eligibility for Chapter 13 bankruptcy depends on whether your existing debt exceeds a specific amount. If you are behind on your mortgage or facing foreclosure, generally this option can work to obtain debt relief, and is a secondary option if you do not initially qualify for Chapter 7.

Benefits of Chapter 13 bankruptcy include:

  • Keep your exempt and non-exempt property if you complete the payment plan
  • Reduce the amount of debt you owe
  • Protection against collection efforts
  • Protection against wage garnishment
  • Co-signers of the repayment plan are immune from creditor’s efforts
  • Protection against foreclosure
  • Extended time to pay non-dischargeable debts

At Aspen Legacy Planning, we are here to help, whether that’s spending time to answer a few questions or getting a plan for you started immediately. We know that estate planning and bankruptcy are not situations where a one-size-fits-all solution exists.

Please reach out to our compassionate legal advocates today to get advice regarding your situation so we can ensure your best interests are protected.
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