Threats to your assets can come from a wide variety of potential predators, such as future creditors and unnecessary taxes. If you are a business owner or professional such as a doctor, dentist, lawyer, accountant, or property owner, you may already be away of the risks of conducting a business.
To best protect your future self and assets, it’s imperative that you act now. Taking action now means you will be able to develop the best plan possible to preserve your wealth. The skilled attorneys at Danna and Associates, PC recognize that people want to leave a legacy for their loved ones. We will work with you to determine your current holdings and identify the best way to protect those assets. Below are just a few of the ways we can ensure that your assets will be available when you need them:
Insurance. Look into a personal umbrella liability policy that will cover you in most any situation that might happen. Umbrella coverage provides extra liability insurance to cover injuries, damage to property, lawsuits, and other personal liability situations. Make sure that you purchase enough, at least equal to your net worth. A call to the insurance agent who handles your homeowner’s insurance policy should be the first step.
Jointly-held accounts. Take a look at any jointly-held accounts you might have. Remember, the money you deposit into a joint account with your kids, senior parents, or business partner is at risk. How? Should a joint owner later become divorced, have a tax problem, or be on the losing end of a lawsuit, then your money in the joint account will be at risk. Accordingly, if you truly must have a joint account (e.g., so your responsible adult child will have access to funds for your funeral), then try to maintain the lowest account balance possible. The same advice applies to any type of asset you may own, specifically including your home.
Partnerships. As with jointly-held accounts, when you operate a business venture as a partnership, whether formal or informal, you are responsible for the actions of your partner. Alternatively, consider creating a Limited Liability Company (LLC) or corporation to give you a greater degree of legal protection from your business activities.
Small businesses. Create a business entity -period. If you own a small business, such as a sole proprietorship, then all of your personal assets are at risk if you are involved in a lawsuit. Consider transitioning your business activities into a more formal entity, such as an LLC or a corporation to limit the business risks to the business itself. This move can shield your personal assets.