It is never fun to lose the wealth and assets you’ve worked hard to accumulate within a short period. If you take no measures to protect them, you can lose them in lawsuits, bankruptcy, divorce, accidents, or in any other situation you haven’t imagined. This is why it is just important to know a few strategies in protecting your savings.
Asset Protection Trusts
According to McCullough & Sparks, this type of trust allow you to transfer a portion of your wealth into a trust managed by an independent trustee. In this setup, your trust’s asset will never go into the hands of your creditors and you can receive some distributions. This, furthermore, will allow you to protect the assets for your kids. When considering this trust, work with an asset protection attorney or a lawyer experienced in this field.
Create a Business Entity
If you own rental properties or want to invest in rental property, create a business entity like a corporation or limited liability company (LLC). This will protect your other assets from unhappy tenants or those who will sue you in the future. You may also want to create a separate entity to shield each property within a single LLC.
Evaluate Your Joint Accounts
There is always a higher risk of losing the money you have in a jointly held account. Any money you deposit with your spouse, children, parents or even a business partner could be wiped out if the other owner files for divorce or lawsuit judgment. Evaluate if you really need a joint account. If you do, try to keep the balance as little as possible.
These are a just a few way to protect your hard-earned wealth. If you want to know the best strategy for the type of assets you have, consult an asset protection attorney. The right lawyer can determine the most suitable way to project your savings. They may advise you to increase your liability insurance, keep your assets separates, or formalize informal business partnerships. The worst thing you can do, however, is to do nothing or wish that no unfortunate event would hit you and your assets.