7 Steps To Protecting Your Assets
Asset protection should be a priority for anyone with – assets. With seven key steps, you can retire with confidence and leave a financial legacy for your loved ones. It is not just the super-rich who need to worry about this either; you or I could easily find ourselves in an uncomfortable situation if our assets are pillaged by disastrous events like lawsuits or even family!
The structure of your property can help avoid probate, family squabbles, and some protection from lawsuits. One of the most important aspects to consider when establishing asset protection plans is which legal structure will work best for you. This configuration can depend on many factors, including what types of assets need protection and which entities seem exposed to a lawsuit. The best way to protect your assets from seizure and garnishment of wages is by understanding the types of claims that might be made against them. This strategy will help you plan for those risks in advance. There are three different types of entities generally used for asset protection: Corporations, limited liability companies, and trusts. The appeal to using these structure types lies in their ability to make assets less accessible in case of a lawsuit.
“Laws may hold some professionals, like dentists or doctors, liable for certain acts in spite of having a “corporate shield.”
Another structure for asset protection is a trust. There is a wide variety of trusts, too extensive to cover in detail here. One type of trust that you might want to consider using for this purpose is called a revocable trust- these allow the grantor some flexibility as long as it does not harm anyone else or dissolve all parts completely by letting everything go out into common ownership. Irrevocable trusts are less flexible. Beware … irrevocable means unchangeable so, be careful and make sure you find a lawyer who is well versed in creating trusts.
Jointly owning a property can ease the passage of wealth to your loved ones without going through probate. If you are thinking about purchasing or are already owning property, consider holding joint title so that automatic ownership transfers after death with no additional fuss!
Keep it simple
As with any business or legal matter, there are many different options for protecting your assets. Some attorneys go way overboard and create elaborate structures that can be costly in terms of time-consuming paperwork – not to mention confusing if you ever need them later on down the line!
An attorney should help structure appropriate ways to maintain asset protection while considering all possible outcomes.
If you have a trust or LLC for asset protection, make sure to retitle assets to the entity. The asset transfer process is quite simple. The first step involves contacting your financial institution, completing an application for transferred funds, and providing relevant documentation. For example, certificates or trusts that may apply in this situation. – It might also help if you keep personal checking accounts away from the trust for ease of use.
This task is something that many people do not realize how much hassle it can help avoid. Our most valued assets allow us to name beneficiaries. For example, the bank account you opened when you got your first job probably enables you to designate a beneficiary, payable on death.
Though it may seem simple, many individuals do not take the time to name a beneficiary for their bank accounts, investments, and retirement plans.
Get started by requesting and filling out the payable on death forms available at your brokerage company or bank. Remember, if you are married, some of these accounts automatically may be partially owned by your spouse. By completing these forms, you will ensure that the proceeds of your estate go straight to whoever deserves it without having to pass through probate. This can save a lot of time and expense!
Consider a Pour-Over Will
You can further protect yourself by having a pour-over will. This last testament ensures that any items left in your name are transferred to the trust upon death so that you have full control of it and all its benefits with this legal agreement. Double-check your list of assets to be certain you have moved all appropriate items to your trust, and all remaining assets are set to roll over.
It is imperative to review your asset protection strategies every year. Life can change in an instant. If we don’t re-evaluate regularly, your family may be unprotected from unforeseen circumstances. After going through all the work to set up these safeguards, don’t leave yourself vulnerable by not taking the time to ensure it lasts.
Hire a Pro
This is your finances, don’t trust it to just anyone! Hiring the wrong lawyer could put your finances in danger. Hire a professional that understands asset protection and sets them up regularly. DrillDown Solution will refer you to properly vetted experts if needed!
*The information in this article does not constitute legal advice and cannot be relied upon as such.