If you have come into sudden wealth – whether by windfall,
asset sale, or inheritance – then now is the time for some immediate asset
protection planning.
Structuring your ownership of those assets in order to
protect them from creditors and predators is something cannot afford to
overlook. However, such structuring and protecting can get complicated. Much of
what you can do (and cannot do) hinges on the nature of the assets, the risks
inherent in those assets, and the threats of liability you may be facing.
Thankfully, there are some common strategies worth
exploring. Forbes recently offered
six proven asset preservation strategies to shield both you and your important
assets.
The article, titled “6 Asset Preservation Strategies To Shield Your Wealth,”
is worth a read.
If you are pressed for time, here is a capsule summary:
- Increase liability insurance: insurance
provides a warchest to defend you against claims and to pay valid claims.
- Separate assets: sometimes the worst thing
you can do is put other family members on title to your assets. Sometimes it is the best thing you can
do. A lot depends on the kinds of protections afforded by State
law. For example, Hawaii law allows you to hold assets in "tenancy
by the entirety," which can go a long way toward keeping those assets out
of the hands of creditors.
- Consider a business structure: the
business exists as an entity that is not “you,” and its liabilities are not
your liabilities, so owning special assets (like rental properties) through an
LLC or corporation will work to shield you and your individual assets.
You can click here to learn more.
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