You work hard to create and grow your family’s wealth. Hours are spent going over every potential investment. Each possible source of passive revenue, from money market interest rates to CDs pass through your mind. Yet you may not be doing nearly enough to protect the wealth you already have.
1) Planning is everything
For all of the measures in security that people take with their homes, their cars, their family, they too often leave their money open to being stripped away. But it isn’t bank robbers in masks you should be worried about.
The Real Risks To Your Cash
You have three main non-criminal categories that risk your hard earned cash.
The first is accidents. This might mean a physical accident (such as something happening that damages an asset). You may be uninsured or underinsured, for example, and so you lose some of your overall sticker value. But it may also refer to an accidental mishandling of funds, missing a payment, underpaying, or simply not understand local laws and how they might impact your financial situation.
Second, you have asset protection. Your assets are immediately tied into the fate of your company, unless you take measures to protect them. Many people don’t understand how the way your file your taxes may also be hurting your funds in the case of lawsuits, back-taxes, and other threats to your wealth security.
Third, you have other people. Maybe you have some business partners who run into trouble down the line, and you haven’t taken steps to protect yourself. Or you could have failed to consider the way your family’s actions could unknowingly hurt your savings or assets. You may have simply just failed to do what you need to in order to secure your assets for your family line following your death.
All of these are very real risks to your assets. It is time to begin properly protecting them, which means identifying the times you are risking too much of your hard earned wealth.
1. You Believe Your Assets Are Protected By Incorporation
Many business owners believe once they have registered their business as incorporated it separates their company and personal assets, keeping the latter protected. The wording used in many descriptions of incorporation makes it seem that way. But it isn’t difficult for lawsuits to circumvent that barrier and go after your personal gains. If your company doesn’t have what is necessary to cover damages in any lawsuit, your holdings could be next.
2. You Don’t Properly Understand Local Homestead Laws
When selling a property that has increased in value, you are subject to a number of steep, sometimes devastating tax laws. But knowing your local homestead laws can make all the difference, as you will be able to make a more informed decision on the sale. For example, transferring the property into a charitable gains trust (CGT) before the sale can save you hundreds of thousands of dollars in capital gains taxes. Especially for properties of higher value, which are already subject to much higher fees.
3. You Have Not Registered an LLC
The most reliable way to protect your assets from a business lawsuit is to separate them entirely. A limited liability company (LLC) will do that. Laws stand between you and anyone who is coming after the company. Even if your business goes under, your personal assets can’t be touched to compensate. There are also flexible tax allowances that give you greater power over your business. You can choose how you file and pay, and for some percentages could be lower when using this option.
4. You Have Not Registered a PLLC
If your business has other partners who may present a liability, you can register a professional limited liability company (PLLC). In the case of your partners falling under legal trouble, you (and your wealth) will stay out of the crossfire. Keep in mind that this does not apply to malpractice lawsuits. But in any other case you are shielding yourself and your family from the mistakes or shady business dealings of your partners.
5. You Aren’t Prepared For The Next Generation Of Your Line
Alright, so you are protected for now. But what happens to your wealth once you pass on? Just leaving your estate to relatives won’t ensure it remains intact. Taxes and fees can bite away at your assets and leave your beneficiaries with much less than intended. Conflicts over interpretation of a will might mean your wishes aren’t properly met. Family limited partnerships (FLPS) can reduce taxation, and an updated and thorough living will honed by a professional can ensure your instructions are clear.
Don’t Leave It Up To Fate…Protect Your Wealth!
Your assets aren’t going to protect themselves. Don’t allow the personal wealth you have worked so hard to build fall victim to bad circumstances. Limit your risk, and make sure you and your beneficiaries are safe.
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About The Author
Jackson Cooper is a investment & finance enthusiast, involved with the experts at American Society For Asset Protection. Look to American Society For Asset Protection, true leaders in the professional Asset Protection industry, to properly guard your assets from lawsuit & litigation. Connect with them online on Facebook – American Society For Asset Protection or LinkedIn. Learn More On The ASAP YouTube Channel