The second part of the series on principles of asset planning looks at other principles that make your asset protection plan the best. With so many loopholes, you need to make sure that what you come up with is foolproof.
Let us get down to business.
Keep it Simple
Many planners think that success comes with complexity. We don’t agree with this 100 percent.
The variables that make you choose one strategy over another need to be complicated; we agree to some extent. Still, the implementation and maintenance procedures of the plan need to be simple and straightforward. It won’t look good if you have to follow tutorial after tutorial just to understand how to use the plan.
Studies have shown that while using multiple firewalls might convince naïve clients, at the end of the day, simplicity is much better. To the client, simplicity translates into less cost.
On the part of the planner, it is prudent that a good plan should be simple. Clients opt for a simple plan that they can implement and maintain. A high-end plan that has many firewalls might encourage fraudulent transfers by the client, especially when the threat has been handled. This is why it is good to have a basic plan that allows clients to add layers as necessary.
So, a planner needs to make sure the client understands the way the plan works. The advisor needs to make the plan simple to the client, regardless of how complex it is. If the client doesn’t have a clue about the working of the plan, then it is too complicated. Talk to an asset protection lawyer to point out the components of a good plan.
It should be Affordable to You, But Not Cheap!
Clients always consider cost when choosing an asset protection plan. Every client has a ceiling when it comes to how much they desire to spend.
On the one hand, the client doesn’t want to spend more than they can afford to achieve the type of protection they want. On the other hand, he doesn’t want to pay peanuts for a plan that won’t protect his assets.
The cost depends on who the planner is and the features of the plan. A low-cost provider might prove worth your budget, but do they offer the same benefits as a fully-fledged plan? Are you merely purchasing a plan just to have one, or do you need it to work well for your needs?
The best approach is to compare different planners and what each plan offers. Find a plan that suits your situation. You need to make sure the value of the assets match the cost of protection that you need. For instance, what will justify you spending $50,000 in protection fees?
One of the biggest misconceptions about asset planning is that you end up losing control to the planner. It is true to a certain level.
You need to retain the protection of the assets, while the planner protects the components of the estate.
We also have many methods of asset protection. Some allow you to control the assets while leaving no authority over the recovery of the assets from the structure.
The biggest mistake is for the client to retain 100 percent control over the assets when it is under protection. As asset protection lawyers, we come across many clients that want to retain full control over their assets, even when this jeopardizes the plan.
The best way is to talk to a lawyer to advise you on how to achieve the best protection without giving up total control. The lawyer can come up with a plan to give you mechanisms that allow you greater control while enjoying excellent protection.
Integrate Your Plans with Other Goals
Asset protection is a vital financial goal – which means you have other goals that you need to set, including estate, tax, and investment planning. Make sure these goals integrate to give you a well-coordinated plan.
You don’t have to integrate it into all the plans; you can do it for one or two of them. While you might have to modify the plan to suit the other goals, it is better than jeopardizing your asset protection plan.
Cheap is Always Expensive!
When it comes to asset protection planning, you need to have an affordable structure that also offers the best protection. Take time to talk to an asset protection lawyer to come up with the best structure that matches your estate.