You might believe that asset protection planning is only relevant for the super-wealthy, but the reality is that those without millions may face even greater risks. A $50,000 judgment might not concern a multi-millionaire, but for a family with modest income, savings, and a home, it could be devastating.
Postponing asset protection planning until a threat emerges is often too late. Effective planning necessitates having strategies in place well before any potential issue arises. Regular updates to your plan are crucial to accommodate changes in assets, family dynamics, and the law.
While consulting with us, your Family Wealth and Estate Attorney®, is essential for tailored advice, here are four fundamental strategies to safeguard your family’s most valuable assets.
Invest In Insurance: Insurance serves as the primary line of defense for asset protection. Lawsuits can arise at any time, for almost any reason, and defending against them can be financially draining. Ensure your insurance coverage not only pays damages but also covers legal expenses. Purchasing umbrella insurance is advisable to cover any remaining damages and legal costs if the primary policy maxes out.
Take Advantage Of Statutory Exemptions: Leverage federal and state laws providing exemptions for specific asset types from creditor claims. Homestead exemptions protect the equity in your primary residence, while retirement plans, life insurance policies, and annuities may be classified as exempt assets. Understanding and utilizing these exemptions can significantly shelter specific assets.
Use The Right Business Entity: Owning a business can generate wealth but also pose risks. Structuring your business as an LLC or corporation creates a protective barrier between personal and business assets. Sole proprietorships and general partnerships expose personal assets to business liabilities. A properly set up entity, coupled with the right business insurance, ensures separation between personal and business activities.
Put The Proper Estate Planning In Place: The inevitability of death underscores the importance of estate planning. Without proper planning, assets may become entangled in the court system, potentially passing to unintended family members or facing depletion. Estate planning is not just about death; it’s a gift to your loved ones. Initiating the process with a Family Wealth and Estate Attorney® ensures that your unique asset profile, family dynamics, and goals are considered for a comprehensive plan.
Your hard work should not leave your family’s assets at risk. Whether you’re starting or updating your estate plan, now is the time to ensure your assets and loved ones are safeguarded. Our Life & Legacy Planning process, beginning with an Exclusive Legacy Planning Session, simplifies the estate planning journey. Contact us today to secure your assets and create a legacy that aligns with your values and desires.
This article is presented by Michelle Bell, an expert in estate planning and business succession services. Our office provides comprehensive legal support for businesses, assisting you in making informed decisions throughout your entrepreneurial journey and in planning for future contingencies. We also offer a specialized session where we review your business’s legal structures. To arrange this consultation, please click the following link: https://calendly.com/mcblawpllc/30min.
The information in this article is intended purely for educational and informational use and should not be considered as advice on ERISA, tax, legal, or investment matters. For advice specifically tailored to your unique situation, such advice should be sought independently from this educational content.