Financial Asset Protection
Isn’t asset protection just for the wealthy? Shouldn’t I worry about it only if and when it happens to me? Won’t I be financially ahead by saving the money it would cost to do the planning? After all, things like that don’t happen to people unless they do something wrong or illegal? Right?
Let’s explore just a few of the possibilities – and there are others.
- Are you vulnerable to PERSONAL LIABILITY, in the event of injury or accident occurring on any properties you own, co-own, manage or occupy?
- Residence – guest & premises liability
- Business – injury, premises, employee acts, etc.
- Boating activities could lead to accident, injury or even death
- Are you vulnerable and exposed to PERSONAL LIABILITY in the event of injury to others caused by family members – whether juvenile or adult – residing in your home? Liability could arise due to injury caused by an automobile, even if driven by a non-family member; or injuries suffered on real estate you own.
- PERSONAL LIABILITY could arise because of personal guarantees given on loans that may be in default.
- Are you vulnerable to PROFESSIONAL LIABILITY for acts, errors or omissions arising from professional services offered by you, your partners, associates or employees?
- Do you have financial or real assets, including earned income and/or passive income, which are not secure from attachment, lien or seizure by creditors, judgment or suit?
- Cash and savings accounts
- Money market account; certificates of deposit
- Stock brokerage accounts
- Equity in homes above statutory limits
- Retirement accounts above statutory limits
- Attachment of wages
- Other real estate
- Have you left your family assets unprotected from the steep costs associated with PROBATE – even if you own a valid will or trust? Wills are subject to probate. Generally speaking, they do not avoid probate, as some suppose. (Probate costs often exceed 7-8% of the gross estate)
- Are you aware of the taxes, penalties and fees that could be assessed against your estate after your death on account of tax-deductible RETIREMENT PLANS? These plans are subject to multiple taxes and fees, including both income tax and estate taxes.
- Have you failed to create, document, fund and implement a CONTINUATION PLAN, Buy-Sell Agreement or similar document to accomplish a seamless transfer of your business interests, including customer lists, equipment, accounts receivable, business real estate, and goodwill? You would want to fix the value of your business, and the value you would want your spouse or heirs to receive, upon your death or permanent disability, before the triggering event. You would also want this document to be updated periodically, and this frequency would depend on the details of your business, growth, addition or termination of members, and other factors.
- Is your INCOME unprotected, or is it guaranteed to be continually paid to you and/or your family in the event of personal liability, death, disability, and loss of professional license, retirement, and market downturn? (Your income is your greatest asset in most cases, and may be subject to garnishment under certain conditions)
- Have you failed to devise an INHERITANCE STRATEGY to bequeath your estate and personal property to selected members of your family, friends, and charities, in the proportions you desire? Have you contemplated the circumstances or events that might trigger, modify or interrupt these payments?
- Your HUMAN LIFE VALUE is the present value of all revenue that you will create during your lifetime, including salaries, fees, bonuses, cost of living increases, management or consulting contracts, deferred compensation and retirement plan monies that you may earn. (or may be deprived of earning)
- Have you failed to obtain all the permanent, investment-grade life insurance that the carrier will issue? Here are some reasons why you should:
- Loss of earnings
- Loss of management skills to the business (Key Person)
- Loss of Unique Ability to seize and capitalize upon opportunities
- Replenish for the loss of income, estate, or other taxes occurring after the death of the Earner
- Loss of expertise of the Principal toward Estate Creation
- Safety net for future contingencies
- Lifetime Settlement potential
- Counteract the impact of long term inflation
- Are you operating your business or profession as a sole proprietor or partnership? Have you procrastinated in organizing your business under a “C” or “S” corporation, LLC or other corporate entity, which could offer some degree of insulation from liability? (Consult your attorney or other professional counsel)
- Do you hold title of your personal residence as Joint Tenants With Rights of Survivorship (JTWROS) which could throw the entire present value of your home into probate, entailing significant legal, appraisal, probate fees and costs in the event of a common disaster? (varies by state law)
- Have you named minor children, financially unsophisticated friends or relatives, legally or medically incompetent adults, or even elderly parents, as trustees, guardians, managers or executors in your estate plan? Remember, your estate plan should be designed for the long haul, spanning years, decades, even the lifetimes of infant children. Plan accordingly.
- Have you failed to set up appropriate protection devices, such as special needs trusts, for minor or adult children who have chronic medical, psychological or emotional needs, and who may require extraordinary support in the future? Failure to obtain proper guidance could jeopardize your child, parent or loved one’s eligibility to receive otherwise available benefits (i.e. Medicare, Medicaid, Etc.)
If you answered YES to any of these questions, you may have significant issues with the Asset Protection that you should have in place. You should seek adequate legal, financial and our advice immediately.
We are practitioners in Family Banking Systems, estate and financial planning concepts, and have served Business Owners and Professionals throughout the United States for over 35 years.
Please call our offices for a comprehensive review, as well as recommendations and referrals.
*Joe Pantozzi is an Investment Advisor Representative. Securities and advisory services offered through Ameritas Investment Corp. (AIC), member FINRA, SIPC. Alpha & Omega nor Insurcorp and AIC are not affiliated. Securities Email: firstname.lastname@example.org.
Representatives of AIC do not offer tax or legal advice. Please consult your tax advisor or attorney regarding your situation.