Basic Steps Estate Planning to help you protect your Assets
Most people talk about how to grow your assets. However, there is a different side of this topic – how to protect and preserve these assets. There may be different ways of doing this including diversifying your assets, but the reality is that all the risks associated with your assets are market-related. And the most significant one often happens outside of the financial markets.
Always keep in mind that nothing will ever protect your wealth if you engage in illegal activities. According to experts, as your wealth grows, you might be more vulnerable to lawsuits and any other legal assault action. This can significantly wipe out your assets.
Generally, estate planning is one of the best ways to successfully protect your wealth and make sure that you can pass it on to your children and other heirs before you die. It is essentially all about preparing for the transfer of your hard-earned assets at the time of your death. Estate planning can be perceived as an effort to successfully protect and preserve your investment assets and ensure that they can be transferred to the right heirs upon your death and reduce tax obligations as well. Here are the most important steps in estate planning.
First things first: Safeguard your assets
Keep in mind that lawsuits can come from nearly any direction and according to experts, the likelihood of facing a lawsuit increases with your portfolio. These lawsuits can come from relatives, neighbors, customers, employees, and more. Even if you end up winning the case, keep in mind that you will have spent some money fighting it off. The best way to protect yourself from such legal actions is to remove one or all your assets from the reach of a potential lawsuit.
Create a will
This is the least expensive and simplest way to start an estate plan. A will is a legally enforceable document that clearly indicates your intentions for the distribution of your investment assets. These assets could be personal or financial. A will can offer you a chance to allocate the distribution of your assets to very specific people.
Set up a trust
According to financial and investment experts, trusts are a virtual necessity in case you own substantial assets. Unlike wills, some trusts may also offer you living benefits in the sense that they can protect and preserve your assets even when you are still alive.
Consider insurance as a safety net
It is important to note that insurance is an integral component of a reliable estate plan. It can offer the funds used to enhance your estate or even fund a trust. However, different types of insurance can be used to protect you and your investment assets from different legal challenges.
Always remember that estate planning is not a DIY project. You need a highly skilled financial expert and an experienced lawyer. These professionals understand the right laws and regulations to be adhered to and the pitfalls to avoid.