No matter how much money and assets you have, creating an asset-protection plan can be a wise decision to make in life. This type of plan is designed to help you avoid losing the wealth you have earned and built up over the years, and a financial adviser can help you create a plan that is ideal for your situation.
You Have Worked Hard to Build Your Wealth
An asset-protection plan is designed to help you protect the wealth you have built up. Building wealth is not an easy task. It usually takes a lot of hours and hard work, and it may require giving things up for many years so that you can save more money. If you have spent many years working hard to have the money and assets you have, you will not want to lose the money you have. This is one of the reasons you should develop an asset-protection plan.
It Will Protect You from Creditors
One of the main reasons to develop an asset-protection plan is to make sure your money is safe if you are ever sued. If you make one mistake in your life, it could leave you in the middle of a lawsuit. If you lose the lawsuit, and the other party is awarded a lot of money, you will have to pay the money if you have it, and this could be devastating to your portfolio. It could wipe out all your money and assets, but this can be avoided through the right type of planning.
An asset-protection plan does not involve anything illegal. Instead, it focuses on using strategies to make sure your money and assets are exempt from creditors or lawsuits. The primary aim is to make sure that every asset you have is considered exempt instead of non-exempt.
It Is Part of Estate Planning
The third reason to begin your asset-protection plan now is because it is part of estate planning, and this is something that is very important if you have children. Asset protection does not only stop creditors and plaintiffs in lawsuits from taking your money, but it also ensures that your children will receive their inheritances from you when you are no longer here.
There are a variety of different techniques that can be used to protect the assets you have. One option is to transfer personal assets into your business; however, this option is only available if you have a business that is considered a separate entity, such as a corporation. If you transfer your assets to your corporation, they will legally belong to the business and not to you. If someone sues you personally, they cannot touch these assets if they belong to your business.
Another good tool used for asset-protection planning is an irrevocable trust, which is a commonly used strategy for estate planning. When you have an irrevocable trust, you can transfer assets you own into the trust. When you do this, the trust will actually own the assets. In other words, the assets will no longer be considered yours, which means no one can touch them if they sue you.
You could always put assets in someone else's name for protection. This is called retitling assets, and it is another good strategy to consider using. If you do this, you should make sure you fully understand the risks involved with it.
There are so many different strategies available for asset-protection planning, and there are many good reasons to start your plan now. If you would like to learn more about this, contact a financial planner as soon as possible.
When my card was declined at the grocery store a few months ago, I realized my financial situation had hit rock bottom. Instead of ignoring the problem, I decided to meet with a financial counselor to see what I could do to make things better. I talked with him about how to handle unplanned expenses and how to budget for my day-to-day life. It was incredible to learn more about money, and now I can proudly say I am living within my means. I decided to make this blog for anyone that struggles with financial planning so that you can turn things around.