If you have come into sudden wealth – whether by windfall, asset sale, or inheritance – then now is the time for some immediate asset protection planning.
Structuring your ownership of those assets in order to protect them from creditors and predators is something cannot afford to overlook. However, such structuring and protecting can get complicated. Much of what you can do (and cannot do) hinges on the nature of the assets, the risks inherent in those assets, and the threats of liability you may be facing.
Thankfully, there are some common strategies worth exploring. Forbes recently offered six proven asset protection strategies to shield both you and your important assets.
The article, titled “6 Asset Protection Strategies To Shield Your Wealth,” is worth a read.
If you are pressed for time, here is a capsule summary:
- Increase liability insurance: insurance provides a warchest to defend you against claims and to pay valid claims.
- Separate assets: sometimes the worst thing you can do is put other family members on title to your assets. Sometimes it is the best thing you can do. A lot depends on the kinds of protections afforded by State law. For example, Hawaii law allows you to hold assets in "tenancy by the entirety," which can go a long way toward keeping those assets out of the hands of creditors.
- Consider a business structure: the business exists as an entity that is not “you,” and its liabilities are not your liabilities, so owning special assets (like rental properties) through an LLC or corporation will work to shield you and your individual assets.
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