Asset protection is one of the fundamental areas in an investor’s financial life. It basically refers to a set of legal techniques that deal with protecting assets of individuals, business entities and other investors. Protection of assets is extremely vital because anyone with substantial assets could suddenly become liable to a major lawsuit, be on the receiving end of legal proceedings taken against them by spouse, employees, clients or creditors or can incur substantial loss in their net worth. To counter such unanticipated situations, it is essential to protect one’s assets sufficiently.
Setting up an asset protection plan is not an easy task in today’s fluctuating environment. Every plan needs to be properly designed and executed. The plan needs to be structured in such a way that it benefits the investor to the maximum. Asset protection is the method which is taken in order to prevent the risk of the assets (personal or professional) from being seized. It is a known fact that the more assets you possess, the more care you need to take protection. If you have decided to relocate to another country or region, the rules are going to be different from the ones you are familiar with in your native country. Apart from adhering to them, here are some other factors to keep in mind as well.
Asset Protection Trust
Protection of assets can be done in a number of ways. One of the most effective ways is to use an asset protection trust. A trust is a contract between the person who wants to protect his assets and the trustee, who manages the assets. There may be many reasons apart from asset protection, to set up such a trust. They include :
- to legally reduce tax
- to have adequate protection when a lawsuit occurs
- to make the process of offshore wealth accumulation, easy and simple
- to keep your assets private and confidential
- to have the freedom to do as you wish with your assets
- to make the assets inaccessible to creditors
There is no need to specify the importance of insurance, especially when it comes to the protection of assets. Lack of insurance can get you into all kinds of problems and pose high risks. If you have a high net worth, taking insurance is a must and your best safety net. Insurance provides you with the ultimate protection against a multitude of problems.
You will be making a wise decision if you take the help of professionals when you invest. It is a known fact that investments must not be concentrated and should be distributed. Diversification is needed in order to minimize the risk factor. As the market is unpredictable, it is wise to spread your wealth.
There are many financial experts whose assistance can be sought to help you in every step of the way. Be it filing your tax returns, managing your portfolios, managing your funds or opening up accounts, all these services are taken care of by professionals. If you have a sizeable net worth, it is best to avail these services as they will help you take care of any legal issues.
These are very popular amongst many expats, and have several benefits. If a country has stricter governing policies, opening an offshore corporation is the ideal choice. An individual possessing a lot of assets can save professional fees and maintain confidentiality by owning assets through an offshore company, as financial information is kept private.
Last but no the least, it is very important not to be taken in by websites and business firms that are not genuine. Before you trust a company with your assets and money, make sure they are legitimate and check the financial background of the company, starting with how long it has been in existence. Leave no stone unturned in confirming the authenticity of the company.
Whether it is a business entity, a private company, trust, corporation or any other body, planning and managing your assets is of the utmost importance and must not be taken for granted. The above mentioned tips would have given you a fair idea about what you can do to safeguard your assets. It is best to do all the implementation in a stable market, as an up or down in the market may affect your decisions.