Six Tips to Ensure Your Assets Are Safe

Asset safety and security refers to protecting your property and belongings, paying your liabilities, taking care of your dependents, and ensuring equal distribution among your beneficiaries according to your rules. 

Six Tips to Ensure Your Assets Are Safe

In addition, you must ensure that your properties and belongings fall in the right hands after your passing. Specific rules and laws help ensure that your assets remain within control during and after your lifetime. 

Some asset protection options include insurance, 401 k benefits or IRA, offshore trusts, homestead exemptions, prenuptial agreements, domestic asset protection, alternate dispute resolution, insurance, establishing trusts, or Limited Liability Companies to ensure business asset protection.

The strategies to protect varied assets differ according to the type of asset. For example, an affidavit protects the last Will or other legal documents. Similarly, you can limit who can access your trust and how much they can retrieve at a particular time.

That said, let us look at similar strategies you can follow to ensure the security of your assets.

1. Domestic Asset Protection Trusts

This type of asset protection tool ensures the safety of your assets from creditors. Establishing a domestic asset protection trust enables you to get creditors off the trust while allowing you to pass your assets to the rightful beneficiaries. 

Here's a tip for you to get started; type in set up living trust on Google and begin adding properties you've bought, the cash you've saved, jewelry you own, and stocks to it to ensure the proper distribution and safety of your assets even after you die. 

Remember, these trusts are irrevocable, meaning you cannot add or delete assets once the trust establishes. In addition, this trust comes with a share for minors, pending taxes, and alimony to maintain it.

2. Insurance Policies

Buying insurance can help protect you from liabilities. For example, house insurance helps protect your property from house damage. An auto policy ensures reimbursement in case of accidents or other damages to your vehicle.  

An umbrella policy helps supplement liability coverage of a house, auto insurance, or life insurance policy. For instance, the court decides to reimburse you $1 million because of a vehicle accident. In that case, your auto policy may have a liability limit of $300,000 for personal injuries and $100,000 for vehicle and property damage. 

Even though, on average, it costs $300 to $500 a year for a $1 million policy. But, the umbrella policy helps cover the rest of the $600,000. However, it does not protect against negligent, criminal, fraudulent, or reckless driving. 

Therefore, whenever you buy any insurance, make sure that you combine it with an umbrella policy to cover the liability limits. Regarding life insurance policies, creditors are exempt from asking for their claims. 

After your passing, your life insurance policy will ensure the protection of your assets by the State. An annuity insurance contract promises the same security.

3. Prenuptial Agreements

Signing a prenuptial agreement helps protect your assets in the event of a divorce. Couples usually agree to sign the agreement before marriage, and it goes both ways. It helps keep the spouses' assets separate as opposed to joint accounts to save their assets during the divorce process.

A prenuptial agreement covers savings, bank accounts, properties, investments, inheritance, and business assets. Although during the marriage, couples are free to buy shared properties or businesses. 

In the event of a divorce, the split would be in half. On the other hand, if you have had your own business since before marriage, your spouse cannot lay their claim on it at the time of divorce if you have signed a prenuptial agreement before marriage.

Similarly, if you have kids, both parents must pay for the child support. 

4. Place Assets in Your Spouse's Name

The protection of valuable assets is best done by owning them separately. Creditors cannot reach your spouse's separate assets. It works mainly if one spouse has a riskier lifestyle. You can name or transfer your assets to your spouse with sole ownership. 

You can also add it to your premarital agreement as a clause. For example, suppose the husband enters a business by taking credit. In that case, he can sign a contract with his wife to protect certain valuables under his ownership that business creditors cannot reach. 

Alternatively, if both the husband and wife sign a co-mortgage agreement on a new house, both would be equally liable and vulnerable to debts. That is why sole ownership is helpful. 

However, one major disadvantage of this strategy is that you would be jeopardizing your division of assets in the event of a divorce. Your spouse may not want to return or split the property that is now legally theirs. 

5. Homestead Exemption

A homestead exemption policy protects a certain amount of the total value of your home against creditors. It helps retain the ownership of your residential property and is a statutory exemption available in most states to protect your home from bankruptcy. 

However, you can only apply for it after the passing of your residential tax abatement. It also offers property tax protection and ownership rights after the death of the owner's spouse. Tenancy by the Entirety

In many states, you can title your home as 'Tenancy by the Entirety,' which protects your property in case of a lawsuit. If your state allows it, it would be statutory-based and would not require you to spend a lot to implement and maintain the title. 

It is also a way for married couples to own equal property rights and keep them out of probate. Equal property rights do not mean 50/50, but instead, 100% of the property, making it mutually exclusive. In the event of one of the partner's death, the property automatically transfers to the sole ownership of the surviving spouse without going through the transference procedure. 

Conclusion

Protecting your assets against creditors and liabilities can only happen if you ensure proper control and ownership over your assets. In addition, setting up trusts and buying insurance policies protects your assets from future problems. 

Homestead exemption and tenancy save your residential property from property tax and in case of a lawsuit. Signing a prenuptial agreement helps protect your assets in the event of a divorce. Similarly, placing assets in your spouse's name helps keep creditors away. 

Therefore, you may take advantage of such policies within the US to ensure protection and control over your assets long after you've departed. 



Previous Post Next Post

Sharing is caring!