Asset protection is not something most people think too deeply about. Most of us are busy trying to accumulate assets to give serious thought to consider the importance of protecting what we have. A recent article on The Motley Fool investment website notes that there are a number of things that can harm an investor more than a great return on an investment can help, and recommends that we take these four steps to protect our assets:
Get the right insurance coverage. Life insurance, disability insurance, auto insurance, homeowners insurance, health insurance and long-term care insurance are all ways you can protect your financial security by shifting most of the risk of an accident or unplanned event to someone else – your insurance company.
Delay Social Security benefits. One of the major benefits of Social Security is that it is one of the few sources of revenue that can withstand inflation and downturns in the stock market. Delaying benefits for at least until you are at full retirement age — and up to age 70 if possible – will maximize your payout and that of a surviving spouse.
Have an estate plan. Creating an estate plan helps you provide for your family after you are gone in the most tax-advantaged way. Use tools like trusts to minimize taxes and avoid probate so your assets will pass automatically to your heirs without getting tied up in court. Another important aspect of estate planning is assigning powers of attorney and drawing up an advance medical directive so your wishes are respected when it comes to your own health care.
If you are a business owner, choose the right structure. If you own a business, choosing the right business structure for personal liability protection and taxation can dramatically affect your financial circumstances.
By Jac Schuster is an Estate Planning attorney in McKinney. Learn more at texasfamilybusinesslawyer.com.