Atlanta Financial Blog

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?

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.

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.

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

Is There “Life” after the Stretch IRA for Your Estate Plan?

In the last addition of our newsletter, my colleague Chris Blackmon covered some of the tax implications of the newly-enacted SECURE Act. As you may know, the SECURE Act (which stands for “Setting Every Community Up for Retirement Enhancement Act”) was signed into law in late December and became effective January 1st of this year. As Chris outlined, the Act makes significant changes to how retirement accounts can be funded, drawn down, and passed on to the next generation. While many of these changes have obvious tax ramifications, in this article we want to explore further the less obvious estate planning impact of these changes.

February 12, 2020

The Better Way to Budget – In Reverse

Around the beginning of the year I tend to get a lot of questions – both from clients and friends – about how to do a better job budgeting and saving on a regular basis. Studies have shown that saving money is one of the top five New Year’s resolutions, and is also one of the top five resolutions most people fail. The reason for that is simple: Our traditional version of budgeting is difficult to establish, time-consuming to manage and allows minimal margin for error.

January 28, 2020

Five New Year’s Resolutions to Keep in 2020

At the start of a new year, many of us sit back and make resolutions about a number of different things. It may be spending more time with your family, losing weight, traveling more, any number of things that are important to you. These are probably things that you have resolved to do previously but many times as the year goes on, you find that your resolve has dissipated.

However, resolutions around financial goals can be different. Many of these are things to consider and decide on. At the end of the process, you can feel confident that you have considered what is important for your financial health and move forward to the end of the year resolving to do the same the next year.

January 21, 2020

A Common Sense Guide to Heart Health

Want to see some amazing results in your life? It’s been said that a man with health has a thousand dreams, while a man with no health has but one. Don’t you owe it to yourself, your family, your career and your community to have not only a thousand dreams, but also the energy and engagement to make them happen?

January 15, 2020