Estate planning overemphasizes the transfer of asset title to a qualified heir when the asset owner has died. Estate transfer has value but not to the asset owner while they are alive. Asset protection has a different focus. Asset protection defends wealth against the modern threats to wealth, i.e., 1) unreimbursed medical expenses, 2) unnecessary taxation, 3) mismanagement, and 4) lawsuits and judgments.

This video lays out the ways property transfers at death, the pros and cons of each method, and when to use each. There are three ways in which property transfers when the asset owner dies: 1) probate, 2) operation of law, and 3) transfer on death deeds and beneficiary designations.

If you do not have time to watch this video and are married, learn all you can about a 42 USC trust. This trust holds the estate of the first spouse to die for the surviving spouse's benefit, and the trust's assets are not subject to Medicaid liens, spend-downs, and transfer penalties. Federal law requires this trust, a Spousal Protection Trust, to be created in a Last Will and Testament. For this reason, transfer-in-death deeds, beneficiary designations, and living trusts will not work. These asset transfer methods do not protect wealth from medical care costs, death taxes, or mismanagement. The only value proposition of such transfers is the avoidance of probate.

The use of a Spousal Protection Trust does not apply to singles unless they intend to leave their estate to a loved one who is disabled. In that case, a single may use a stand-alone supplemental needs trust or the same trust described in the video.