If you have worked hard to reach your financial goals and you’re finally living the lifestyle you’ve always dreamed of, it can be scary to consider the prospect that it could all be taken away.
Don’t lose sleep at night wondering if the money you’ve worked so hard to accrue will be yours as long as you need it! There are ways to protect your wealth and assets, so even in unforeseen circumstances or an emergency, you won’t lose everything you’ve worked so hard to earn.
Know When to Hire the Right Attorney
It is extremely important to know when to hire the right attorney. Dealing with legal issues can get expensive fast, so making sure you have the right person on your team can go a long way towards protecting your wealth.
For example, If you’re injured in an accident, much of your money could go down the drain on medical costs. Hiring an attorney is important, but you have to make sure you hire the right one. According to Attorney Brian White, “Since most personal injury attorneys work on contingency, you may end up receiving less money if you hire a mediocre or inexperienced attorney.”
Going through a divorce? Even if it’s relatively civil, you should still hire an attorney. Struggling with a business partnership? An attorney can help you find a resolution that doesn’t require you to pay more than you should. When in doubt, schedule a consultation to see how an attorney can work to protect you and your assets.
Plan Your Estate and Keep It up-to-Date
When you think of estate planning, you probably think about what is going to happen to your money and your assets after you pass. This is an extremely important thing to think about. Proper planning can prevent family squabbles and issues, but it’s not the only kind of plan you should have.
If you have multiple assets and multiple streams of income, it is extremely important to plan how they will be used throughout your lifetime. For example, a trust might be used to pay for a child’s education, while earnings from stocks may be used to pay certain bills.
Make sure you revisit your strategy often. This ensures that you’re keeping money in high-yield accounts and you’re covering all of your costs without any shortfalls.
Hire a Financial Advisor You Trust
For those with wealth and multiple assets, hiring a financial advisor is a no-brainer. They can provide you with services that include:
- Guidance on developing an investment strategy
- Asset allocation
- Minimizing taxes
- Rebalancing a portfolio
- How to time retirement account withdrawals
They can also provide you with support when making decisions that make you feel uncomfortable. An advisor can keep your fears and emotions in check, which is extremely important when making decisions that will affect your assets, your income, or your portfolio.
Don’t Put Primary Assets in Your Name
There are many reasons to start a trust. It can allow your family to avoid probate when you pass, it’s a great way to pay for a child’s education, and it can be a great way to support a charity that you feel passionate about.
It can also protect your assets while you’re alive. For example, putting a sizeable investment in a trust with your children as beneficiaries can keep you from losing the money if you’re sued. You can also hold other things, like an expensive car, in a trust in order to keep your name out of public records.
It’s also important to separate personal and professional assets. That way, if you’re ever sued professionally, they can’t come after your personal assets, and vice versa.
A lot of people talk about diversification, but it can be more tempting to put all of your eggs in one basket. When the possible returns seem massive, you may want to go all-in, but a more restrained approach is always the best approach.
Diversification means utilizing a variety of investments to get the biggest return on your money, but it also means diversifying other aspects of your wealth. For example, having a financial advisor is important, but you may want to add a stock broker to your team. You may want to have traditional accounts in the United States, but you may also want to consider trying an offshore account. Diversifying in a variety of ways can help you best protect your wealth.
Don’t Rely Upon Homestead Exemptions or Bankruptcy
It’s surprisingly easy to get reckless with your money, even if it doesn’t seem reckless at the time. That’s because declaring bankruptcy often meant that you could clear away your debts while keeping many of your assets. At least, that’s what it used to mean. Those declaring bankruptcy today aren’t so lucky.
Today, homestead exemptions are limited and changes to the bankruptcy code mean you’ll end up losing a lot more of your assets than in the past. Not to mention, it leaves the future of your wealth in the hands of a bankruptcy judge, which means you aren’t going to fare so well.
Don’t Be Overly Flashy
Protecting your assets and wealth often involves complicated legal documents and in-depth strategizing, but it also includes common sense. You’re just as at risk of theft as you are of suffering a bad day at the stock market.
Don’t be overly flashy with your wealth. That doesn’t mean you can’t buy that boat or the Ferrari that you’ve always wanted, but it does mean that you should keep pictures off of social media. It’s also a good idea not to bring up your purchases or your wealth with the wrong crowd. Even family can get greedy and do something rash to affect your wealth and assets in a negative way.
Just because your money is sitting in a high-yield savings account doesn’t mean it’s safe. From houses to cars to cash, there are many things you should be doing to keep your wealth right where it is so you can enjoy it for a lifetime.