Asset Protection
Asset Protection
If you are "wealthy", "comfortable" or even if you just have some
positive net worth, most likely you are concerned about keeping what
you have, and preventing others from taking it. This concern is real, as
there are people who will take advantage of any opportunity to take
what you have.
If you are a physician you are aware of horror stories about colleagues
who lost everything after being held liable for medical malpractice in
amounts far beyond their malpractice insurance.
Asset protection planning enables you to employ legal techniques to
prevent anyone from taking your assets. However, there are limitations
as to what you can and cannot do.
Your degree of exposure to risk of liability, the type of assets you own,
and your total net worth are essential factors to consider when you and
your lawyer develop a strategy for asset protection. Your occupation can
be one indicator of the risk of liability -- for example, a pyrotechnics
engineer has tremendous occupational exposure. Statistics can help you
decide your risk factor, and help you to assess what kind of asset
protection you need.
Insurance is the most common asset protection technique. By
"transferring" the risk to an insurance company, you can usually protect
your assets. But even if you buy insurance, it might not cover all possible
risks that you face, or the amount you buy might not be sufficient, or the
insurance company might be able to deny the claim (perhaps it could
claim there were misstatements made in your application), or the
insurance company may become insolvent. Asset protection planning
helps you prepare for these "wild-card risks".
Formulating asset protection strategies is one financial planning module.
Contact us. We can help.
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