Did you know that you may lose your hard-earned assets with just one lawsuit? You read that right. It does not only happen to professionals from the medical industry and the corporate world; it can happen to anyone at any time. Without careful planning and management, you might end up losing your assets through several circumstances. You will never know when you will be forced to file for bankruptcy, get divorced, or lose a lawsuit. If you don’t want all those years of hard work to go to waste, then it is best to implement strategies that will protect your assets.
To save you from future worries and headaches, here are several proven and tested ways of protecting your assets.
1. Getting Your Assets Insured
One way of securing the stability and safety of your future finances is by getting insured. Your home and other valuable belongings are the fruits of your labor, so it is only right to make sure that you are financially property in case they get destroyed or damaged. More often, these properties are expensive and too difficult to replace or repair in case of unfortunate events. If you want peace of mind, then securing insurance for your home, cars, and other belongings is certainly a smart move. Every insurance has its own policies and coverage so before you purchase anything make sure that what your prospective insurance provider offers is aligned with your needs, preferences, and budget. It is best to shop around first so you can get a better price. It is also recommended to stick with an insurance provider who has a good credit rating.
2. Prepare a Will
If you want to legally protect your family and your possessions, then you need to prepare a will. Ann Turnbull from WayManAndLong recommends using the services of legal experts to make sure you have the right type of will for your family and your circumstances. If you are married or have children or positive net worth, then it is best to have a will prepared early on. Without a will and testament prepared, your family will lose control of your possessions and last wishes. The government will step in and call the shots in distributing your money and other material belongings.
3. Abide by Contracts and Legal Procedures
If you are dealing with formal transactions in a fraudulent or negligent manner, creditors can gain access to your personal assets easily. To protect your assets from civil lawsuits and creditors, you must make sure that you deal with every business transaction legally. This means taking care of your due charges on time, managing your taxes efficiently, and more. If you are running a business with professionals, then it is best to only hire or deal with people who are licensed and well-established. You must also make sure that every transaction is documented and formally signed. Remember, it is better to be cautious of the little things than put your assets at risk.
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4. Retitle Your Assets
If you are married and have a risky occupation or lifestyle, then retitling your assets to your spouse is an option. This is particularly helpful if you get involved in a legal dispute. Once you have placed some of your assets under your spouse’s name, your creditors will no longer have the power to get a hold of those assets. Before you proceed with retitling your assets, only go for specific assets like your residential property, for instance, as it is not practical nor possible to place all your assets to your spouse’s name.
5. Set Up an Irrevocable Trusts
Another effective way of protecting your assets against lawsuits is through irrevocable trusts. An irrevocable trust is a type of trust that cannot be revoked, altered, and amended. Once you set up an irrevocable trust, the trust gains total control of your assets and how it will be distributed. As the trust is now the asset owner, creditors will not be able to touch your personal assets even if you are the beneficiary of those assets. Some irrevocable trusts you can set up is a trust fund for your heirs, charitable trust for tax benefit purposes, and life insurance trust for your term or permanent life insurance policy.
Life is filled with unexpected circumstances, so it is best to be prepared right from the start. There are several ways of protecting your assets from lawsuits, creditors, and other life-changing events. Ultimately, the best asset protection plan should be tailored according to your needs, preferences, lifestyle, and the total number of assets.