As we grow older, we try our best to build our wealth. If we’re lucky, we can end up with several attractive assets under our names. What many people fail to realize is that wealth accumulation should not be a priority.
Since you have spent time, energy, and effort in building your wealth, you should try your best to safeguard your assets. But the question is: how? Here are a couple of things that you can start doing to secure your assets better:
Always have the right kind of insurance
Insurance comes in many forms. If you don’t insure your assets, you’ll have a hard time protecting them in case of unfortunate events. If you have your own home, make sure that you have homeowners insurance. For your vehicles, check the policy limits of your automobile insurance and keep in mind the exclusions. No matter your asset, having the right kind of insurance is extra protection and peace of mind on your part.
Form a limited liability company, corporation, or limited partnership
For individuals with businesses, one common mistake is failure to keep their personal assets separate from their business assets. When they make poor business decisions and their company suffers, so do their personal assets. What you can do is to form a limited liability company (LLC), corporation, or limited partnership (LP). This allows you to reduce your exposure against a huge personal liability.
Take advantage of an asset protection trust
An asset protection trust (APT) in Provo is a type of trust vehicle that allows you to shield your assets from creditors. For instance, you have been sued. If you lose the case, the creditors can take hold of your assets. Without an APT, you can lose your wealth. By having a reliable APT, you give your assets the kind of protection against any lawsuits, creditors, or judgments. Only you, the beneficiary, will have access to your funds.
Make contributions to qualified retirement accounts
When it comes to retirement accounts, certain measures stop creditors from having access to the funds. This usually pertains to qualified retirement accounts controlled by the Employee Retirement Income Security Act of 1974 (ERISA). Of course, there are certain limitations to such accounts. But if you want to safeguard your wealth from the creditors, then consider putting some of your wealth in retirement accounts.
Consider equity stripping
This is a strategy that you can use to reduce the overall equity of one of your properties. Remember that no one will have an interest in individuals without assets. Equity stripping works like this. For instance, when you apply for a home equity line of credit (HELOC), you allow your mortgage lender to have a claim over the property. But you still get to use your property and have control over its cash flow.
Protecting your assets is your own responsibility. If you don’t conduct thorough research on how to best safeguard your assets, then you are the only one to blame if anything bad happens. Don’t let all your hard work go down the drain and protect your wealth better with these simple steps.