Have you ever wondered what would happen to you and your family if there was an accident or some type of change in your circumstances? Would it cause you and your family to lose your home, your finances or more? What can you do?  You could look into liability insurance. Liability insurance can be your first line of defense against claims that could potentially drain your financial resources.  Liability insurance includes, but is not limited to, homeowners insurance, auto insurance, business insurance, disability insurance, and umbrella policies. Each type of insurance is important in safeguarding your assets from different types of liabilities. Below are some examples:

  • Homeowners insurance. The goal of this insurance is to protect you against claims from accidents occurring on your property, making sure that a slip and fall by a visitor does not jeopardize your financial stability.
  • Auto insurance. The goal of this insurance is to cover liabilities from accidents involving your vehicle, which can be considerable, especially in serious accidents.
  • Business insurance and disability insurance. The goal of these insurances is to protect you from serious threats to both your source of income and the business you are building. These policies can work hand in hand to make sure you do not face a catastrophic challenge.
  • Umbrella insurance. The goal of umbrella insurance is to provide an additional layer of protection beyond the limits of your homeowners and auto policies. It covers a wide range of potential liabilities and can fill in the gaps left by other insurance policies.

You need to know that without sufficient liability insurance, legal judgments against you may be satisfied by your assets. This action could impact your estate’s value and your ability to leave a legacy. So what should you do?  How can you protect your legacy?

We highly recommend looking into estate planning. Be aware that estate planning is more than just the distribution of your assets upon death. Estate planning includes a variety of tools and strategies designed to protect your wealth and ensure that it benefits your chosen heirs and creates a legacy according to your wishes. By working with your experienced Wisconsin estate planning attorney in creating wills, trusts, and other estate planning instruments, you can specify heirs for your assets, avoiding the default outcomes dictated by state laws. In addition, your estate planning attorney can also advise on the possibility of reducing estate taxes, thereby preserving more of your wealth for your heirs, and create trust agreements to protect assets from creditors, lawsuits, and other threats, providing long-term security and control over how and when your assets are distributed.

As you can see, when you integrate liability insurance into your estate plan you create a strong defense against the unexpected. You want a comprehensive strategy that not only protects your assets today but secures their value for future generations. The following are ways for your liability insurance to work with your estate planning:

  • Plan to review your insurance coverage on a regular basis with your Wisconsin estate planning attorney. Keep in mind, when your estate grows and changes, so should your liability insurance. Having regular reviews with your estate planning attorney enables you to be sure that your coverage matches your current needs and any gaps are promptly addressed.
  • Be sure to align insurance with your estate documents. It is very important that the beneficiaries of your insurance policies and your estate plan are aligned. Discrepancies can lead to unintended consequences and disputes among heirs.
  • Look into using trust agreements to provide additional protection. Be aware that a trust can provide a level of asset protection that insurance alone cannot. For example, an irrevocable trust. It can protect assets from both creditors and legal judgments, complementing the umbrella coverage you may have.
  • Take time to educate your heirs. Part of a comprehensive estate plan should include educating your heirs about the structures you have put in place, including the role of insurance in protecting the estate. This knowledge can enable them to maintain the integrity and value of your legacy.

To conclude, protecting your legacy requires foresight and a comprehensive strategy. Liability insurance and estate planning are not standalone solutions. They are integral parts of a comprehensive strategy to protect your assets and secure your legacy. When you understand how these components work hand in hand, you can be sure that your wealth is protected against both immediate and future threats. 

We know this article raises more questions than it answers.  As an estate planning and elder law firm, we urge our clients to take advantage of these tools and resources, ensuring comprehensive financial health and security. We want to help you protect your aging relatives. We encourage you to contact us and schedule a meeting with attorney Alan Hougum today.