{"id":3072,"date":"2022-01-01T20:50:55","date_gmt":"2022-01-01T20:50:55","guid":{"rendered":"https:\/\/fusionwm.com\/?p=3072"},"modified":"2022-09-01T23:11:43","modified_gmt":"2022-09-01T23:11:43","slug":"a-wall-around-your-wealth-the-importance-of-asset-protection","status":"publish","type":"post","link":"https:\/\/fusionwm.com\/a-wall-around-your-wealth-the-importance-of-asset-protection\/","title":{"rendered":"A Wall Around Your Wealth: The Importance of Asset Protection"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n
<\/div>\n\n\n\n

Success can come with a major downside: It can make you a potential magnet for lawsuits\u2014including frivolous and unfounded ones\u2014and other attacks that can wreak havoc on your financial health and stability. <\/p>\n\n\n\n

Indeed, you may very well know someone in your life who has been sued. Maybe it was you!<\/p>\n\n\n\n

That means you\u2019ve got to take steps to protect the assets you\u2019ve worked so hard to build from being unjustly taken. Otherwise, you may jeopardize your financial security and that of your company and your family.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Why you need asset protection\u00a0<\/h1>\n\n\n\n

Asset protection planning as we define it is pre-litigation planning that is designed to deter lawsuits if possible\u2014and if not, to encourage favorable settlements. <\/p>\n\n\n\n

The logic of asset protection planning is clear: You build a wall around your wealth that is as difficult as legally possible for litigators, creditors and others to scale. Instead of trying to fight it out with you in court for months or years and risk losing, the litigant sees that the only reasonable option from a legal standpoint is to settle for pennies on the dollar\u2014or, ideally, to leave empty-handed.<\/p>\n\n\n\n

Important: <\/strong>Asset protection isn\u2019t about \u201chiding money\u201d from the world\u2014quite the opposite, in fact. You want<\/em> anyone who might come after your assets to clearly see what you have done to build a wall around your wealth. Why? It shows them the difficult legal path they\u2019d have to take to get at that wealth\u2014which, hopefully, will cause them to settle, negotiate, or (ideally) throw up their hands and walk away. <\/p>\n\n\n\n

The good news is that the threats to your wealth from other people and entities are probably on your radar screen. Take successful business owners, for example. More than 85 percent of successful business owners say they are concerned about becoming the object of unjust lawsuits or being victimized in divorce proceedings (see Exhibit 1). <\/p>\n\n\n

\n
\"Wall<\/figure><\/div>\n\n\n

Here\u2019s the bad news: Only about a quarter (27.5 percent) of successful business owners have a formal asset protection plan in place (see Exhibit 2). The percentage is even lower among those business owners who say they are concerned about protecting assets. Given the risks that our litigious culture presents, these numbers are likely far too low. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Note: <\/strong>Half of the successful business owners who are not concerned about protecting their assets do <\/em>have formal asset protection plans in place. That makes sense to us: Having these plans may give business owners enhanced confidence they are well-protected\u2014and allay their fears about being unjustly sued. <\/p>\n\n\n\n

<\/div>\n\n\n\n

Five asset protection action steps<\/h1>\n\n\n\n

If you\u2019re among the many successful people out there who lack an asset protection plan\u2014or if you\u2019re simply curious whether your existing plan is still as strong as it needs to be\u2014consider taking a few key actions. <\/p>\n\n\n\n

1. Get protected before a claim against you is made.<\/h3>\n\n\n\n

You can do a lot to protect your wealth before a liability arises\u2014but thanks to a concept known as \u201cfraudulent conveyance,\u201d very little can be done after. As with insurance, the time to have asset protection in place is well before you need it\u2014or even think you might need it. <\/p>\n\n\n\n

2. Cover the basics.<\/h3>\n\n\n\n

Evaluate your liability insurance and other related policies, and maximize them as best you can. Probably the fastest, easiest and cheapest move you can make is to take out a large umbrella policy to safeguard assets. Another simple but powerful strategy can be to place your assets in someone else\u2019s name, such as your spouse\u2019s. If you\u2019re sued, those spouse-controlled assets are often untouchable. <\/p>\n\n\n\n

Pro tip: <\/strong>Be sure you have a great deal of trust in your spouse and your marriage before transferring ownership of assets to him or her. In a divorce, your spouse could potentially walk away with those assets\u2014or you could be forced to fight for them at least as hard as you\u2019d fight a creditor who went after them. <\/p>\n\n\n\n

3. Consider a variety of other asset protection strategies.<\/h3>\n\n\n\n

The asset protection strategies you may need will depend on your specific situation, of course. That said, it\u2019s generally a good idea to consider your options, which might include:<\/p>\n\n\n\n