Atlanta Financial Blog

Asset Protection

Asset Protection: Don’t Just Build Wealth— Defend It

Rick Henderson, CPA, CFP®, AIF®
March 28, 2019

Are you prepared to protect your assets in case you get sued?

Hopefully this won’t happen to you, but the hard reality is that successful, financially secure individuals, especially business owners and professionals, are targets — a magnet for actions such as lawsuits and torts. For example, more than a third of physicians (34%) have had a claim filed against them at some point in their careers.1 For business owners, 36-53% of small businesses are involved in at least one litigation in any given year.2 Even if these claims or lawsuits are frivolous, they can be frustrating and potentially devastating to your financial well-being.

The good news is that there are clear, legal ways for you to protect your assets. The overall goal is to protect yourself and your family by isolating your assets from potential attackers – building barriers that are extremely difficult for lawyers, creditors and other plaintiffs to penetrate. With strong barriers in place, potential litigants will hopefully be discouraged from bringing a lawsuit, or encouraged to settle quickly on terms very favorable to you.

So, what steps can you take to protect the assets you’ve worked so hard to build from lawsuits and other unfounded and even unexpected liabilities?

  1. Put your plans in place in advance.

Protect your wealth before a liability arises or a claim is made. It is much more difficult to put effective protection strategies in place once a claim or liability is present.

  1. Don’t overlook the basics.

Make sure that you have the basic titling and ownership structures in place regarding the assets that you want to protect. Proper ownership/titling and the use of certain entity types like corporations and LLCs can be very effective to help protect assets. Keeping good records and following the rules and standards for your profession or industry can be very helpful. Also, evaluate your risk exposures and potential liabilities and obtain insurance to protect yourself against them to the best of your ability. For example, for many people, a large umbrella policy is generally an efficient, expedient way to safeguard assets.

  1. Evaluate advanced asset protection strategies and work with qualified professionals.

Beyond the basics, there are numerous sophisticated strategies that you can take to protect your assets. While offering the benefits of asset protection, some of these strategies can be irrevocable, or at best be very hard to reverse, along with possibly having other potential downsides. Also, if an asset protection strategy is poorly structured or not executed properly, it may not be effective when you need it the most. Therefore, when putting asset protection strategies into place, it is important that you work with professionals that are highly qualified and experienced in this area.

If you would like to learn more about how asset protection strategies might benefit you in your situation, please contact your advisor at Atlanta Financial Associates.

 

1InsuranceJournal.com March 7 2018 For US Doctors, Being Sued is a Common Ailment

2Forbes.com July 14, 2014 You’re Going to Get Sued-Here’s How Not to Get Screwed, Basha Rubin

Share This:

Share on facebook
Facebook
Share on linkedin
LinkedIn
Share on twitter
Twitter
Share on google
Google+

CAN Money Buy Happiness?

For most of our lives many of us have heard the old adage “Money can’t buy happiness.” And we can all think of numerous examples of individuals where this certainly seems to be true – whether among the powerful and famous, or within our own family or group of friends. But is that really true? Research over the last few decades suggests “NO!” In fact, many studies show that in one sense money can buy happiness. But it’s not the amount of money we have, but rather how we SPEND our money that can indeed increase our happiness – although perhaps not in the way Madison Avenue or Amazon Prime would like us to think. First, let’s address the skeptics among you who feel sure that if you simply had MORE money you would indeed be happier. Statistics show that certainly isn’t true, since 70% of all lottery winners or those with a sudden financial windfall end up bankrupt within a few years.1 Carl Jung, famous psychologist, said in fact that the keys to happiness were five things.

Read More »
May 13, 2019

The New Tax Bill: Tallying the Results

“How did the new tax bill affect me?” was the question on everyone’s minds this tax season, and for good reason. Even though this was touted as the greatest simplification of the tax code in my lifetime, I didn’t notice any reduction in time spent preparing returns. Those of you who reviewed your returns in detail noticed that the schedules look drastically different although contain all the same information. The short answer for many is that it didn’t materially change your overall tax liability. The outliers fell into one of a few buckets…

Read More »
May 13, 2019

How to Choose the Best Trustee for your Estate

No one enjoys thinking about what will happen after they’re gone, but we all want our families to be well cared for. Many people set up trusts to provide for their loved ones, but the trust is only as good as its trustee.Choosing a trustee is one of the more difficult decisions in creating your estate plan. Some attorneys suggest choosing several trustees to promote checks and balances, but sometimes choosing just one trustee can be difficult in light of family relationships and other factors. Choosing a trustee is a very personal and complex decision, but there are some basic guidelines one should consider.

Read More »
May 7, 2019

“Honey, I shrunk the tuition … burden”

It is that time of year again where school years are coming to a close and many parents are gearing up for a bitter-sweet high school graduation or are celebrating their child being one year closer to a hard-earned college diploma. Whatever the case may be, it is hard to deny the heavy lift education costs can be. You may not be able to shrink the bottom-line cost of attendance any further, and you surely can’t impact how fast many costs are going up, but, you can reduce the weight this line-item carries within your financial plan by remembering these 5 things:

Read More »
April 23, 2019