For every penny that you save towards your retirement or even a future business, comparable planning has to go into keeping your investments safe. Even with liability insurance, your assets can still be calculated as part of your net worth and be levied, garnished or seized to pay debts that you are deemed to owe. To safely continue to invest and save, use asset protection used as a tool prevent against you possibly losing them to creditors or lawsuits.
Who Needs Asset Protection?
Although multi-million dollar businesses often use asset protection to prevent against going bankrupt, they can be equally important to people who have jobs, or those who don't have a high net worth amount. Essentially, anyone who plans on leaving an estate, saves for retirement purposes, real estate, or simply has extra money left in the bank can't just leave it exposed to potential losses. Remember that any assets in your name can potentially be lost if an entity makes a legal claim against you.
Isn't Liability Insurance Good Enough?
Whether you have a liability insurance policy on the car that you drive or the home that you live in, there is a cap on the amount your insurer will pay on your behalf. So if someone decides to sue you for an amount of money that is higher than the maximum amount of liability insurance policy, you might be liable for paying the difference. Additionally, having a liability insurance policy does not guarantee that all claims are going to be approved and paid out.
Can't Filing For Bankruptcy Absolve All Debts?
There are different types of bankruptcy claims that individuals and businesses can make to get rid of or reduce debts, but going bankrupt doesn't mean that you won't also be required to liquidate all your assets. On top of that, if a claim is made against you before you are able to file and be approved for bankruptcy you may still need to pay the entire amount due. Filing for bankruptcy without adequate protection puts people in a position where their entire net worth amounts are subject to seizure or forfeiture.
If you have assets in any form that you have been building upon or even plan to start building your retirement plan so that your future will be secure, you need to find out how asset protection may apply to you. Financial advisors as well as estate planners will give you vital information on how to keep your future and actual assets well secured in case they become subject to a lawsuit or creditor claim.Share
8 March 2017
After we bought a house, I started realizing that we were going to need to learn to save a little money. We had become pretty laid back about spending because we were so accustomed to making so much extra each month, but with a mortgage, we found ourselves running out of money on a regular basis. I decided to get real about our finances, which is why I set up a financial plan to stick with year round. You wouldn't believe how much of a difference that simple plan made. We went from scraping together money to head to the grocery store to sticking with a rock solid budget.