It’s an unfortunate truth that your risk of being involved in litigation increases as your assets increase. It’s vital that you work with an experienced attorney to utilize wealth protection strategies that will ensure your future financial security and allow you to pass assets to your heirs as you intended.
Beefing Up Your Retirement Accounts
Increasing your retirement contributions is an easy and efficient way to protect assets from any threat of litigation. Federal law offers unlimited protection to ERISA-qualified retirement plans in the event of bankruptcy, and this protection can be extended to litigation as well. Additionally, an Individual Retirement Account (IRA) is protected up to a balance of $1 million.
Often, retitling assets can protect them from being seized by creditors or in a legal dispute. If you’re married, for example, titling your assets as tenants-by-the-entirety with your spouse allows the property to immediately pass to the surviving spouse upon the death of the other. This also typically exempts an asset from creditors if one spouse receives a judgment for his or her sole liabilities or debts.
Creating a Limited Liability Entity
A limited liability entity separates personal assets from those associated with your business or income sources such as rental properties. When you create a limited liability entity, liability within the entity is limited to assets within the entity. This is important because it protects you from exposing personal assets when your business faces legal action.
Buying Liability Insurance
If you don’t already have a policy, you need one today. Think of liability insurance as your first line of defense against any threat of litigation, whether you’re talking about your personal assets or your business assets. However, if you are expecting an inheritance in the future, you should consider buying an umbrella policy offering protection for the full amount of this anticipated asset.
Getting Personalized Advice
Wealth protection is a complex topic because every individual has unique concerns that must be addressed. If you’re interested in learning more about what wealth protection strategies are best suited to your situation, call Legacy Lawyers today.