February 2, 2015

As people grow their wealth, they often forget about the fact that it can be exposed to major risks if not planning properly. Some of the most common threats to wealth include lawsuits, bankruptcy, or divorce, but an individual may only realize just how harmful these can be after it’s too late. Using trusts, LLCs, or other entities, your assets can be protected from these dangerous threats.

Typically, a basic approach to asset protection is to guard assets from lawsuits first. Yet, as it mentioned in this Time article talking about building wealth, clients are often not convinced about the benefits of doing this even when it’s brought up by a professional. In many cases, the hesitation has to do with the way you think about money. 

Some of the common thoughts that clients who have built wealth have when the planning conversation happens include:

• “I already have liability insurance; isn’t that enough?”
• “Asset protection planning is only for extremely wealthy people.”
• “Asset protection seems shady.”
• “You won’t be sued unless you’ve given someone cause to come after you.”

Although these are thoughts held by many Americans, there are flaws in their logic. In an ideal world, these reasons might cover your bases, but that’s not the world we live in. The reality is that without asset protection planning, you are exposed to a tremendous amount of risk. Trying to plan in the moment of crisis doesn’t do you any favors. Asset protection planning should be approached early to avoid the catastrophic outcomes that can been through bankruptcy, divorce, lawsuits, and other problems. To start planning today, contact us at info@lawesq.net.