However harsh it may sound, the truth is that you can lose in minutes, assets that you’ve worked hard for many years. Especially for the high net worth individuals, asset protection is one of the most important things to think about. After accumulating wealth over the years, it is the wish of literally everyone to see what they’ve sweat hard for being passed over to their heirs, family, and future generations. This is where estate planning and asset protection comes in. To ensure that your wealth is properly safeguarded from the mentioned threats, here are some crucial things you should know about protecting your assets.
It Starts With a Plan
Effective asset protection starts with adequate preparation and planning. When you need to protect your property, businesses, and tangible assets, you need to start by identifying the assets that need protecting and develop a strategy to see this through. It is also important to be aware of the threats and risks your assets may face before taking measures to protect them. Once you analyze your wealth, it becomes easier to develop a strategy to protect each of your assets.
An Estate Planning Attorney Is Crucial
Estate planning is the term used to refer to the various measures one can take to protect their family’s wealth. This is usually through approaches like irrevocable trusts, asset protection trusts, insurance, and limited liability entities, among others. It involves separating your name from certain assets to protect them so that no one can claim a lien in case you get into trouble with creditors, for instance. Nonetheless, the estate planning process is rather complex to navigate without the help of an experienced attorney. As the Legal team from The Atlanta Estate Law Center point out, estate planning, wills, trusts, asset protection, and probate law issues require the utmost legal expertise. This is why you need an experienced estate attorney when planning your estate for asset protection.
Some ways an estate planning lawyer can help include:
- Creating wills
- Designating beneficiaries
- Help with setting up trusts
- Establishing ways to legally keep your estate taxes low
- Helping you to avoid the probate court process
Protecting Your Assets through Insurance
As you accumulate wealth, you may require various kinds of insurance. Some of these may include health insurance, life insurance, business insurance, professional indemnity insurance, and so forth. Getting insurance is among the most effective strategies to protect family wealth while still alive and when you die. To some degree, most of the mentioned types of insurance offer a considerable amount of protection to your assets. For instance, business liability insurance can protect your business from certain legal challenges, whereas life insurance ensures that your family’s wellbeing is protected in case you die or become incapacitated. It also lowers your taxes when your assets are passed on to your beneficiaries.
Be Keen When Choosing A Business Entity
This one should be a heads up for all the entrepreneurs out there. You have to separate your personal assets from your business assets! If you have a business dispute as a sole proprietor, your chances of losing all your assets are high because they are all under one name. On the other hand, picking an entity such as limited partnership, corporation, or limited liability company (LLC) develops your investment and protects your assets.
It is everyone’s dream to own their own home. You won’t have to deal with endless calls from the landlords at the end of the month and or anxiety over being told to vacate on short notice. Nonetheless, if you do not protect all your blood sweat, and tears, you may lose it all in a blink of an eye. Thankfully, Homestead exemption can help protect a certain proportion of your home’s value from creditors and bankruptcy.
Titling and Property Protection
Depending on the type of business one spouse is in, the risks tend to be different. When one spouse is exposed to a higher professional risk, it is only strategic for them to have the other spouse’s name on their assets. The reason being, if the assets are on the other spouse’s name, no matter the value of the asset, the creditors cannot reach out to that to pay for the other spouse’s debt. It is called tenancy by the entirety. On the contrary, if they choose to take up loans jointly, they are both liable for it. That means that whatever asset that is available will be taken by the creditors to settle the loan in case of a default.
No one likes the thought of losing what they worked so hard for. However, it does happen to so many people who are not keen enough about asset protection. With the above information in mind, you are hopefully more enlightened about how to safeguard your assets.