Most asset protection “experts” will try to convince you that asset protection is all about helping clients (and you) protect your property and assets from some kind of negligent lawsuit.
Some common examples that illustrate this point;
Yes, those are valid examples of asset protection – BUT – anyone focusing on those types of conversations is NOT focusing on TRUE ASSET PROTECTION.
What are some of the creditors that TRUE ASSET PROTECTION will protect you from?
— The IRS and state government (if your state has a state income tax). The IRS is everyone’s number one guaranteed creditor, year-after-year. EVERY year EVERY person pays taxes to this creditor, regardless of wealth, affluence or social status.
What if you could save 10%, 20% or more in income taxes this year, and every year after? Would you accept that value proposition?
THE ANSWER —> Absolutely
(The Unseen Villain in the Room) = The Markets. What if tomorrow brings another 2008 financial crisis? Are your assets at risk? What if you had a plan to mitigate unforeseen changes in markets, the stock market, and Wall Street that provided ASSET PROTECTION against not just creditors but also against the markets?
What if you could diversify your holdings and be able to accumulate a 5-7% (or more) return on that capital – WITHOUT – the risk of catastrophic losses? Those losses are an absolute certainty, it’s NOT if it happens it’s WHEN IT HAPPENS. Would you consider that ASSET PROTECTION (we do).
Have you gone through the probate process recently? If so, you are certainly aware of the nightmare associated with estates, taxes, and creditors when an estate is settled. Every Tom, Dick, and Harry will stake their claim to “something”, legitimate claim or not.
Estates and trust conversations are NOT isolated to only wealthy people. Creditors and the IRS do not care if you have a $50,000 or $5,000,000, they will TAKE what feel is theirs. Waiting 6 months or longer for an estate to settle, living through estate creditor publications waiting for 3rd parties to stake a claim to your family’s property is NOT FUN, it’s PAINFUL.
The concern is that estate taxes and creditors are paid upon death. Very few advisors truly know “advanced” planning and ways to protect assets, mitigate tax burdens, and protect heirs from creditors. There are special tools, plans, strategies, tactics, and designs to help lower the tax burden and help you and your family ensure that you maintain and build generational wealth, don’t settle for SIMPLE rather insist upon ROBUST!
The number one guaranteed creditor of clients over the age of 65 is the healthcare system and specifically long term care practices.
We mentioned the IRS as the “Giant in the Room” above, the IRS is the creditor we all publicly fear – OUT LOUD. With 100% certainty, LTC is “The Elephant in the Room”. Very few people we meet with will mention long term care during a first round of needs analysis – BUT – it always bubbles to the surface as we progress through individual client needs.
THE REALITY – Any person or family that has accumulated any sizeable nest egg has an innate fear that end-of-life long term care and planning can chew up and completely destroy a family’s legacy if a plan is not properly prepared.
NOTE: Fast forward to the 28:00 milestone in the podcast below and listen to Pat Manno (Manno’s Clothing in Dearborn, Michigan) talk about the RISK of Long Term Care and how it can destroy a family’s wealth.
Hopefully, you have become a little bit more educated and empowered with the true understanding of asset protection, what it is and why it’s important.
It’s a LOT more than having homeowners insurance to protect against slip-n-fall and it’s a lot more than having the proper amount of auto insurance. It’s about protecting what is rightfully yours and learning more about the known and unknown risks that include, but are not limited to;
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