For years, you may have viewed estate taxes as the main threat to your family fortune, especially if you own a successful business or valuable real estate. But with the federal gift and tax exemption set at $11.58 million for 2020, estate taxes are perhaps no longer a concern.

Today you may be more focused on protecting your estate from creditors and lawsuits. There are several ways to accomplish this objective in accordance with prevailing state laws.

Personal assets

The way you handle the personal assets comprising your estate can make a big difference. For instance, you and your spouse may own your home or other real estate as joint tenants with rights of survivorship (JTWROS), for convenience’s sake. But this exposes the property to the reach of creditors.

Alternatively, a couple might arrange to own the property as a tenancy by entirety, when permissible under state law. As with JTWROS, the property automatically passes to the surviving spouse on the death of the other. However, in this case, the property can’t be used to satisfy a judgment against the other spouse.

Also, note that you can use the annual gift tax exclusion to reduce the size of your taxable estate without tapping your gift and estate tax exemption. For 2020, the gift tax exclusion is $15,000 per recipient ($30,000 for joint gifts by a married couple).

Insurance policies

One way to protect your assets from creditors is to secure adequate insurance coverage. This includes several types of insurance policies.

Start off with liability insurance for your business. This is especially important for physicians, attorneys and other professionals who are frequent lawsuit targets and must rely on malpractice insurance.

Similarly, by acquiring adequate automobile and homeowner’s insurance, you can guard against a financial catastrophe. Make sure you understand the key elements, including what is covered, the policy limits and which exclusions apply.

You can buy life insurance naming your spouse and children as beneficiaries. If certain requirements are met, the proceeds won’t be included in your taxable estate. This is often accomplished through an irrevocable life insurance trust (ILIT).