We live in a world where you can lose your assets at any time. Each year, more and more individuals end up bankrupt.
Like any other person with assets or a family to look after, you might be wondering what to do to protect your assets and enjoy lifelong peace of mind.
So, what should you do to protect your hard-earned assets? Let us look at the steps towards answering this question.
Proper asset protection is the foundation of personal and business success.
You are an Easy Target
The first step is always to realize that you are an easy target, especially when you don’t have anything set up to protect your assets. Remember that if you don’t secure your assets early enough, they will end up in someone else’s name!
Here are a few issues that might arise, which have a bearing on your estate:
- An excessive tax bill.
- An accident that leads to a negligence claim.
- Breach of contract.
- Professional malpractice lawsuit.
- Creditor claims for malpractice at your place of work.
- Creditors claiming compensation for a failed business.
- Medical bills and nursing home care.
- Lawsuits from disgruntled employees and business partners.
- Fines for violating state or federal laws.
- Defamation lawsuits.
- Seizure of your property by the government.
These aren’t definitive, because we have more scenarios that can lead to loss of property.
Protect Your Assets
While it offers many benefits, not everyone will embrace the plan. Others believe that asset protection is immoral.
The good thing is that asset protection is legal, and you come up with a plan working closely with an asset protection lawyer. The plan is made with all laws in mind.
Asset protection is the self-defense you have against lawsuit upon lawsuit that is directed towards you. Many of these lawsuits harass you, and some allow creditors to take your money.
Only the people that don’t value their assets are the ones that aren’t concerned with this protection. The good thing is that the law permits asset protection plans as a desirable pursuit, as we see from the many laws that have been crafted to protect assets.
Have a Competent Team
Asset protection plans involve the people that are involved in your wealth. For instance, you cannot ignore the role of your spouse in asset planning.
For instance, how will your spouse feel when you re-title your assets without informing her? Make sure you involve anyone that is included in your finances so that when something happens, they know what is going on and maintain it.
However, as much as you need to communicate your intentions to your team, be careful with disclosures to parties that are outside the team. You shouldn’t needlessly reveal the information to people outside your circle, such as colleagues and friends.
The team needs to include only those that are trustworthy and committed to implementing the plan. Take time to assess the extent of trust that each person has before you divulge information to them.
Come Up with Priorities
What do you want the asset protection plan to achieve? Well, the goals that you come up with depending on your other financial objectives.
For instance, if you want to reduce the tax rate, you should integrate your plan with the tax objectives. Come up with objectives and discuss them with your asset protection lawyer so that he can give you the go-ahead. The lawyer will tell you possible alternatives and how to reconcile any conflicting goals.
For this step, you also need to anticipate the pros and cons that arise from the plan. The lawyer can tell you consequences to each strategy. Once you are done with this, choose the perfect plan that is consistent with your objectives.
Make It a Continuous Process
Asset protection planning isn’t a one-time procedure; rather, it is a continuous process that you have to handle.
Economic situations change.
Legal frameworks change.
So, your asset protection plan should also change.
Don’t come up with a plan and let it work itself out – try and review it at least annually, and even more frequently with a change in the situation such as an inheritance. Running regular updates means that the plan will work for your situation.
Work with Asset Protection ExpertsThe asset protection process also needs the right experts to add professionalism to the team. The most significant influence is the right asset protection lawyer. An accountant should also be part of the team for sound tax planning.