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Everyone thinks of how to make more money. Not everyone thinks of how to protect the money, and other stuff, that they already have. Well, life isn’t all about making money; it is also about keeping it, growing it, sustaining it… you get the gist.
Protecting what you own is important for several reasons. One reason is that we don’t live forever. You need to make sure that who inherits, who gets what, and what goes where is clearly spelled out to avoid confusion and conflict.
Another reason is to protect yourself against lawsuits. Yet another reason is to protect yourself and your assets in cases of accidents, fires, earthquakes, and so on.
Protecting your assets is important, and here you get 7 fool-proof ways that you can do so.
You need to have insurance for your stuff and for yourself. Health insurance, car insurance (if you have a car), house insurance, renters’ insurance, and life insurance are all necessary. While you look at all the available insurance policies around, make sure you look at the deductibles and the premiums too. This helps you understand just how much insurance coverage will cost you. And, when getting life insurance, you can consider getting long-term insurance plans to cover your kids through their university years.
Have a Trust
A trust is great for ensuring the protection of your assets. It doesn’t matter what the asset is, you can manage them well with a trust. You will also keep full control of how the assets are distributed and to who. Having a trust entitles you to reduced estate and gift taxes. Also, you can choose who will succeed you as a trustee to manage the assets when you can’t. There are different trusts, all with their own benefits and disadvantages, so have a thorough discussion with your lawyer or financial advisor before setting one up.
Own Nothing, Personally
In the case of a lawsuit, it hits your personally owned assets the worst. So own nothing, personally: own everything in a trust. You can own some of your stuff, but for assets like property and large savings and investments, owning them in trusts is safer.
Have an Estate Plan
No one likes to think of when they die. Death seems so morbid that a 2020 study by Trust & Will and Caring.com showed that more than half of American adults don’t have a will! If you don’t have a will, and you’re a parent, get one. A will is an example of an estate plan. Estate plans make things uncomplicated in the event of your death or inability to decide yourself. They ensure that all your assets are protected and properly distributed when due.
Use Protected Entities
Limited Liability Companies are good examples of protected entities. LLCs have provisions that prevent creditors from taking your business or your assets. It is such provisions that make leveraging protected entities a great idea.
Have an Emergency Fund
Your emergency fund is NOT the same thing as your savings. Emergency funds are usually liquid accounts where you have stashed up to six months’ worth of expenses for those unforeseen circumstances, such as faulty plumbing or getting involved in a car accident. These funds also keep you afloat if you get laid off from work or have a sizable salary reduction from your employer. Make sure you set up a savings account AND an emergency fund and make the deposits to those accounts automatically.
Always plan ahead. No one wants to get into trouble, but everyone knows that life always has its challenges. Prepare for them by planning your asset protection ahead of time. It is better to be prepared when the trouble comes than to prepare when trouble is already at your doorstep.
There you have it, 7 fool-proof ways to make sure your assets stay protected. Talk with your lawyer or financial advisor to figure out what and what you can do to protect your stuff. Keep the future as you plan and prepare.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.