Financial security is supposed to result from working hard, saving money, and making smart decisions including investing appropriately. Unfortunately, even if you do everything right, your wealth could be lost in an instant if you have bad luck or if bad things happen to you. One of the smartest and most important money moves you can make involves taking steps to insulate yourself from risk so a little bit of bad luck does not mean the end of your financial security or the loss of your ability to leave a legacy.
Asset protection is essential for everyone, and it should begin as soon as you start to acquire assets. It is a very personalized process which requires you to understand your biggest risk factors and identify ways to protect your wealth. It is something that you should do with help from an experienced attorney who understands the legal tools you can use for asset protection. To find out more, contact Parman & Easterday, PLLC today.
Our legal team helps clients in Oklahoma and Missouri to create personalized plans to secure their wealth. We have also prepared an asset protection worksheet you can use to get started on the process of keeping your nest egg safe. Take advantage of the worksheet below to start the asset protection process, but do not take a chance on trying to secure your wealth without the right legal help from a knowledgeable professional.
Identify Risk Factors
The first step in asset protection is to identify the different risk factors that are the biggest possible sources of loss. These risk factors can differ greatly depending upon whether you are self-employed or work for someone else and, depending upon many other factors, specific to you and your family.
Some common risk factors that you may wish to include on your list, depending upon your situation, include:
- Risks due to lawsuits against your business if you own all or a part of your own company.
- Risks due to business debts, if you own your own company and/or sign as a “guarantor” for company debts.
- Risks due to personal lawsuits, such as if you hit someone with your car or someone falls in your home.
- Losses due to personal bankruptcy caused by a job loss; medical event; or other unexpected expense.
- Loss of assets if you are forced to spend down your personal wealth to pay for nursing home care for yourself or for a loved one.
- Loss or decline in value of assets if you become incapacitated and cannot manage wealth appropriately.
- Irresponsible heirs, who could cause loss of your wealth when you pass the wealth onto the next generation.
- Estate tax, which could cause loss of your wealth when you pass the wealth on to the next generation.
You may also have other things that put you at risk. Begin by making a list of the things you are concerned could cause you to experience a loss of money or property.
Identify Assets You Own
You need to consider what kinds of assets you own and those you wish to protect. Some assets, like retirement accounts, are provided more protections under the law than others. Some states allow you to retain more equity in your personal residence than others. There are also some assets which you may have a difficult time putting into a trust, which is one of the most common asset protection tools.
Make a comprehensive list of the different assets that you have so you can work with an asset protection attorney to identify the right approach to keep each source of wealth safe.
List Possible Approaches to Protection of Your Assets
Once you have listed your assets and identified risks, you can make a list of possible methods of asset protection. There are different ways to approach the protection of assets, each of which have pros and cons. Making a list of different approaches to asset protection is something that you should do with an experienced attorney. They can explain the different avenues open to you.
Some of the possible approaches to asset protection that you may decide to include on your list of potential methods to keep your wealth safe include:
- Formation of a Limited Liability Company (LLC) which can provide protection to those who own businesses.
- The purchase of insurance policies including homeowners’ insurance, auto insurance, renters’ insurance, long-term care insurance, health and disability insurance, and an umbrella insurance policy. When insurance is purchased, paying attention to liability limits is important.
- The use of trusts to protect assets in the event that you become incapacitated. Trusts can also facilitate the protection of assets by preventing those assets from counting if you try to get Medicaid coverage to pay for your nursing home care instead of paying privately for care yourself.
- The use of accounts which provide certain legal protections, such as traditional and Roth IRAs and other tax advantaged accounts.
- The creation of a prenuptial or postnuptial agreement to provide protection when property distribution occurs and spousal support decisions are made in the context of a divorce.
- A good asset protection plan may involve a combination of different approaches aimed at addressing your unique risks. An experienced attorney should be consulted to provide the protections that you deserve for the wealth you have worked hard to create.
Contact an Asset Protection Lawyer
This worksheet can help you to get started in asset protection by getting you thinking about the assets you want to protect and the tools you wish to use. However, making effective use of legal protections under Oklahoma or Missouri law can be complicated. You cannot afford mistakes.
You should talk with an experienced attorney at Parman & Easterday, PLLC to find out about how our legal team can assist you. Give us a call today at (405) 843-6100 or contact us online. We will arrange a time for you to speak with a caring, compassionate and knowledgeable lawyer who has a long history of offering comprehensive assistance with all aspects of asset protection.