"A place to trade ideas on a number of different topics!"

Protecting your assets from a lawsuit

Have you worked so hard to earn your present assets? Do you want to make your cash and your family assets as protected as possible? You may want to consider methods in which to protect your resources. Did you know that there has been a surge in lawsuits over the last 10 years? Every year, in America, over more than 20 million lawsuits are filed and registered. About 90% of the attorneys live right here in the United States. Unnecessary to say, considering the figures above, it is likely that you may be charged or found liable for one reason or another. If you have your own company, spend money on properties, or you are into a professional practice, your odds are 1 in 3 that you will be charged with a lawsuit this year. These figures are incredible however there are methods to protect your assets. While lawsuits used to be something most individuals did not fear about. After all, you are living an excellent lifestyle and doing the right things without breaking the law. The issue is not with you but with individuals who think they can get wealthy fast and often do by feeding on you. Many people filing lawsuits are starving for cash and willing to do anything for it.

Considering the high costs of high court decisions nowadays, many professionals are looking for ways to protect their personal assets from both negligence and malpractice claims. If you’re a medical expert and own a house, a car or a high stock portfolio, it’s vital to protect your assets from lawsuits. Luckily, a sound financial planning and management can go a long way toward protecting your personal assets against the risk of lawsuit. A comprehensive wealth management plan can also help you accomplish other long-term financial targets, which may consist of preparing for a child’s education, ensuring a great pension plan for you and your spouse and reducing property taxes for your heirs.

When it comes to guiding your assets, key concerns consist of the following:

  • A well-organized financial plan discourages many lawsuits
  • Good asset protection doesn’t have to be costly
  • An experienced wealth manager can help you take a more incorporated approach to achieving your financial targets and goals

basics

Start with the Basics

There are three basic stages of asset protection. The first is making an investment in assets that are automatically secured from lawsuits in most states and countries, such as your house, certified retirement accounts, annuities and the cash value of life policies.

The second stage is developing private trusts and organizations that remove your assets from your personal estate. The third stage is making individual ownership entities in different areas and jurisdictions, making it tougher for people to place liens on your assets through lawsuit.

For many professional, a great beginning point is by basically using the first stage of asset protection-investing most cash in assets that are automatically secured from lawful threats in most states. Many professional ignore these simple strategies:

Your Home
A portion of your house value is usually exempt from lawsuits in most states. In Arizona, for example, up to $150,000 in estate equity is exempt from any lawsuits. Texas and Florida provide endless coverage for home equity. (Note: There are a few states, such as New Jersey, which do not exempt house value from lawful cases.) Once you have exceeded the protected home equity value in your state or country, you may want to consider maintaining a mortgage for the remaining value of your house, as the plaintiffs in a lawsuit won’t be interested in your debt-only your resources.
Qualified Retirement Accounts
Money put in ERISA-qualified pension accounts, such as Defined Benefit or 401(k) programs, is usually exempt from most lawsuits, so it often seems sensible to maximize your annual income to these accounts. Not only do you take advantage of asset security, you’ll also enjoy tax-advantaged savings on the long run, making your cash develop faster. Nonqualified pension programs, such as deferred compensation programs, may also have a role to play in assisting you accomplish your wealth management goals. Nonqualified programs provide some security against lawful cases, as well as exclusive advantages for highly paid entrepreneurs and employees.
Deferred Annuities
A deferred annuity symbolizes cash you set aside now to make future earnings, usually for retirement. If you have not yet started taking withdrawals from your deferred annuity, the value of your annuity contract is usually exempt from lawsuits. Apart from offering asset protection, annuities can help supplement other sources of earnings in pension, such as Social Security or withdrawals from your IRA or 401(k) records.
Cash Value of Life Insurance plan Policies
Once you have done a life policy for at least two years, the cash value of the plan is usually guarded from lawful cases in most states. What’s more, the cash value of the policy can often be utilized via tax-free withdrawals and loans in pension, which may prove especially attractive if tax rates increase in the future as many expect.

assetprotection

Asset Protection Myths

When it comes to protecting your assets, there are often a lot of uncertainties among professionals other about what techniques provide genuine satisfaction and peace of mind. Here are some common resource security misconceptions to be aware of:

Exploring Innovative Strategies
If you’re just beginning your profession, the first stage of security (investing in resources that are instantly exempt from lawsuits) may be all you need for now. As you get further along in your profession and your individual net value is growing, you may want to consider discovering some advanced techniques for asset security, including developing trusts, organizations and LLCs. Moreover, you may want to consider developing these entities in different areas, making it tougher for individuals to place liens on your individual property. Have it in mind that “protective” trusts, organizations and LLCs can be costly to make and maintain, so you should discover all options with your group of financial experts and consultants before choosing a particular asset protection plan.
Creating an Air-Tight Plan
The most effective asset protection strategies begin with sound financial planning. If a judge or court of law determines that you are trying to “hide” assets from creditors, they may remove the exempt status of those assets. For instance, if you buy a big life insurance policy shortly before declaring bankruptcy, a court of law may determine that any assets involved in “last-minute” transactions are still subject to legal actions. The best protection for your assets is to show that you have legitimate reasons for structuring your assets with many other benefits in the way that makes the most sense for you and your family over the long term. In a court of law, your intent is the key. Your intent for establishing accounts can’t be to avoid situations of responsibility. Rather, your intent should be associated with responsible and ethical financial planning, such as planning for a comfortable retirement or the smooth transfer of your estate to your heirs.
The strategies mentioned here are simply “conversation starters” to have with your wealth manager, attorney and tax professional. Every doctor has unique needs and goals, so your personal wealth management and asset protection plan will need to be tailored to your specific situation. In addition, asset protection laws can vary widely by state. The key to creating an effective asset protection plan is starting now before you need one. By creating a team of trusted professionals, discussing your goals and reviewing your plan on a regular basis, you can create a wealth management plan that has you fully covered against unexpected events-a plan that helps you feel more confident about your financial future.
The most efficient asset protection techniques begin with good financial planning. If a judge or courts of law discover that you are trying to hide your asset from creditors, they may eliminate the exempt status of those assets. For example, if you buy a large insurance plan shortly before announcing bankruptcy, a court of law may decide that all the assets involved in “last-minute” dealings are still subject to lawful actions. The best security for your assets is to show that you have genuine reasons for constructing your assets with many other advantages in the way that makes the most sense for you and your family on the long run. In a court of law, your purpose and intent is the key. Your intent for creating account can’t be to avoid situations of responsibility. Rather, your intent should be associated with responsible and good financial planning, such as preparing for a comfortable pension or the smooth exchange of your property to your children.
The techniques mentioned here are basically “conversation starters” to have with your financial planners, attorney and tax expert. Every professional and entrepreneur has exclusive needs and goals, so your individual wealth management and asset protection method will need to be designed to your situation. Moreover, asset security laws can vary widely by conditions of different states and countries. The key to developing an efficient asset protection strategy is beginning now before you need one. By consulting trusted financial experts, talking about your goals and examining your strategy regularly, you can make a wealth management strategy that has you fully covered against unexpected lawsuit-a strategy that helps you feel more confident about your financial future.

Leave a Reply

Time limit is exhausted. Please reload CAPTCHA.