The WHY + HOW of protecting your assets
What is asset protection?
Put simply, asset protection manages risk when it comes to other people’s claims to your assets. This can be a complex process, it can be helpful to have a team of experts on your side to explain what and how this process works.
That sounds good, I suppose, but I think we can break it down a little further here.
First, we need to define what we’re protecting against.
Within asset protection, you can include taxation, seizure, lawsuits, or other losses.
Okay, so what tools can we use to protect these assets?
Most asset protection tactics fall into two categories: Insurance and law.
With insurance, you always want to make sure you are adequately covered personally and professionally.
The more wealth you have, the more complex this process can be. Working with a comprehensive financial consultant to create a financial plan can be really useful here, as we can take a look at your complete financial picture–every income stream, asset, investment account, insurance policy–to find the gaps a standalone investment professional or insurance broker may not see.
At North Star, we can even do the same approach for your business!
A holistic financial consultant can also work in tandem with your lawyer to double-check all of your partnerships, jointly held accounts, and businesses are set up appropriately to help manage risk on the legal side.
Who benefits from an asset protection strategy?
I would recommend a minimum level of asset protection for any individuals and families, but especially those whose wealth makes their situation more complex.
Even if you don’t feel like you need it, I would recommend a quick consult with a financial professional to make sure you’re not missing any risk areas that could potentially be very costly.
Additionally, asset protection is important for business owners, who experience risk in their business finances, but still rely on those funds for income and potential retirement.
With the number of accounts, contracts, and documents you deal with as a business or practice owner, working with a financial consultant to create a financial plan and engaging an attorney can be essential to spot check your processes.
Now, that was a bit technical, but here’s the takeaway:
The more complex your financial situation gets, the more valuable professional support becomes.
If you are someone who needs an asset protection strategy, the fiscal benefit you get from these solutions can outweigh the cost you put in should the worst happen. At the very least, it can provide a sense of security.
Know someone whose finances could use a little TLC? Make an introduction!
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Financial Professionals do not provide tax or legal advice and this should not be considered as such. Please consult a tax or legal professional for advice regarding your specific situation.
Separate from the financial plan and our role as financial planner, we may recommend the purchase of specific investment or insurance products or accounts. These product recommendations are not part of the financial plan and you are under no obligation to follow them.
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