Undertake Asset Protection Planning for Professionals
Edited by owen, Charmed, Nerissa Avisado, Rob
Asset planning is an important aspect in the lives of many professionals, from doctors to lawyers and businessmen. This is a necessary step to secure and protect you and your loved ones' future, while attending to the requirement of life and professional commitments.
Unfortunately, many professionals are still unmindful on how to go about it and start asset protection planning. This is your way of safeguarding your wealth against those who may have interests or claims against it. They can be creditors or your former spouse.
Asset protection is for you and your family or heirs. Seeing your assets lose value becomes a sorry state. Your assets should go to your heirs as you wish and not let the court or anyone else decide. When you have asset protection, it helps insulate your assets in a legal manner. You do not engage in the illegal practices of concealment (hiding of the assets), contempt, fraudulent transfer, tax evasion or bankruptcy fraud.
Consider this article as your guide on how to jump-start the planning process.
Scenarios Why You Need Asset Protection Planning
Not all of your assets are yours. You have a silent partner who comes when you have liability, death, taxes and other fees to settle. Studies show that these draw off 15% to 60% of your total asset.
- If you die suddenly, your assets will help pay for "final expenses." These include medical bills, funeral expenses, estate tax, income tax, property tax, lawyers and other fees and debts need to be settled.
- Your bank accounts and money market placements are frozen.Your heirs are compelled to put up for sale your assets or loan money. They find it hard to quote a higher price. People know they need the money badly to pay for all those expenses and fees. Buyers are bargaining to a lower price.
- Your family or heirs can only get your assets after those fees are paid in cash.Whatever amount is left depends on how you planned for this. If only you have a foresight and able to plan for this.
- The good news is that most expenses and fees can be avoided. Your assets cannot be the source of payments, or your estate upon your death. There is still time for you to plan and shield your assets or estate from shrinking.
Planning to protect your assets should be a priority especially in this litigious society. Don't put yourself at risk for a disaster you can mitigate with proper planning. Go for the asset-protection structure that best fit your state of affairs, you'll be able to safeguard your finances for yourself and your family.
Essential Instructions to Follow
- 1Don't wait for individuals to make claims against your practice.Start the asset planning procedure before claims are submitted.Advertisement
- 2You will end up losing if you plan late in the day.Start planning now.Advertisement
- 3Keep in mind that a liability and professional insurance will only supplement planning, and should not replace it. The great thing about having insurance is that this can help you cope with a fraudulent transfer claim. In case you were charged in court and ordered to pay, then the insurance can pay for the lawyer services and the settlement.Don't think that asset protection planning can take the role of insurance.
- 4There was a time when a bankruptcy filing was an escape for many, likened to a comfortable escape for many professionals and business owners to wash off all the debts. This is no longer the case after the medication of the laws in 2005. The homestead exemptions have been reduced and there are now limitations.Never count on bankruptcy as your escape.
- 5But then this can be tricky when you or your spouse file for divorce.A simple way to protect the assets is to transfer some of the assets under the name of your spouse.
- 6Put more money into the employer-supported retirement plan since this can come with great protection.
- 7This is a great move so that your personal assets can be protected when your business has met some difficulties.Have a separate fund for personal assets and business assets.Advertisement
Tips, Tricks & Warnings
- Asset protection planning is like a process of building 'a wall around your assets'. You can either go for complex financial solutions and professional help, or simply come up with creative means to help secure your assets.
If you have problems with any of the steps in this article, please post in the comments section below.
Categories : Financial
Recent edits by: Nerissa Avisado, Charmed, owen