Are You Making these 5 Asset Protection Mistakes?
In a world of litigation and high tax rates, it is incredibly important to make sure your assets are properly protected. Metroplex Wealth offers asset protection near Dallas, Texas, with a staff that is well versed in how to best protect your money.
That being said, we have seen many asset protection mistakes over the years, and here are 5 of the top mistakes we see often. Are you making these asset protection mistakes?
Clients Who are Underinsured.
Let’s start with insurance. Sure, insurance can’t protect all of your assets, but it certainly helps. We see many clients who think they have enough insurance, when in fact there are underinsured. In the case of a lawsuit, a large umbrella liability policy is critical. Depending on your career and assets, work with an estate planning attorney to determine the proper amount of umbrella insurance for you.
Believing Assets in Living Trusts are 100% Protected.
Trusts certainly offer asset protection near Dallas, but they do not offer 100% protection in the case of living trusts. Living trusts give the grantor the opportunity to move money in and out at various times, so in the event that creditors come after you and your money and you are still living, a court may determine that you need to use money in the living trust to pay off a creditor. That being said, trusts are excellent vehicles for asset protection, but it’s important to visit with an estate planning attorney about if you are opening yourself up to risk with the trusts and living trusts you have.
Improperly Titling Assets.
When protecting your assets, it’s important to know what assets are titled under your name and to formulate a game plan for titling in a way that best protects you and your money. Do you have adult children who cars or other assets that have your name on them? If they run into issues, then you can be liable. What about your spouse’s creditors for property you share together? Talk with a firm like Metroplex Wealth that specializes in asset protection near Dallas on what is best for you.
Exposing Yourself to Risk Through IRAs
IRAs are a great vehicle for long-term retirement savings, but unlike 401K plans that are governed by federal law, the rules about IRAs are governed by state law. Take a look at your state laws on IRAs – both Roth and Traditional – and see if you are unnecessarily exposing yourself to risk.
Not Designating Assets to Heirs
Providing for and leaving assets to your heirs can get complicated, particularly if there are multiple spouses involved and many players in the mix. Depending on your specific situation, trusts can be a great asset protection vehicle but there are other methods of protection that can be utilized as well.