Estate planning is a process that not only helps you leave behind instructions regarding who you want to inherit specific assets from your estate but that also helps you maximize the legacy that you leave for the people you love.

One of the more pressing concerns for the executor of your estate and your beneficiaries will likely be the amount of debt that you have when you die. The higher your debt level, the more likely it is that creditors will make claims against your estate that will diminish or possibly consume the assets that you hoped to leave for your children or other loved ones.

Lenders and other parties can go after your estate

If you have a home with a mortgage on it or a vehicle with a loan against it, you probably understand that the lender who financed the purchase will expect repayment before the vehicle or house can transfer to someone else. What you may not realize is that other, unsecured debt can also impact the size of your estate.

For example, in New York, it is relatively common for hospitals that don’t get their bills paid to take civil action against the party that owes money. If you are in the hospital for several weeks before you die because of a car crash or a sudden medical event like a stroke, the hospital could sue your estate and possibly consume every cent that you intended to set aside for your loved ones after you died.

In other words, even if you don’t have debt right now, that doesn’t mean that debt won’t impact your legacy.

Proper estate planning can help protect your assets from creditors

There is always the possibility of planning to protect your assets. Even if you don’t currently have debt and don’t expect to incur substantial debt in the near future, careful planning now could protect your loved ones if something happens in your last days that would have a drastic impact on your estate.

Many times, putting major assets into a trust can be a quick and straightforward way to protect your assets. Depending on your circumstances, you may also want to explore alternate options, including survivor designations on certain bank accounts or changing the way you hold title on your home so that your share of the equity passes directly to your spouse when you die so that no one can claim your share of the equity.

Discussing your assets and your intended legacy with an attorney familiar with the New York probate system can give you a better idea of what options might work for you.