Every person is at risk of financial disaster when lawsuits are presented and even when taxes are filed improperly. The best way to protect personal and businesses related wealth is through intentional asset protection planning. This protection has prevented many people from losing unnecessary wealth in a lawsuit and to save money on taxes; and in cases of inheritance, ensure successors receive what was intended by the benefactor. Here are three prominent ways asset protection helps guard wealth:
#1: Safety from Lawsuits
Asset protection effectively safeguards a person’s financial health. It protects personal and business related assets from creditors who can claim them to cover the cost of damages and fees in a lawsuit. Many people don’t believe they are at risk for a lawsuit, but the truth is every person and business is vulnerable. Some professions, including medical, hold a higher risk of facing a lawsuit and often times they can seem frivolous and non-threatening.
According to the American Society of Asset Protection, there are more than 100 million lawsuits pending in the United States; one is filed every 30 seconds, and 43% of business owners have suffered a lawsuit or were threatened by one. Even if you win the case, the fees associated with a lawsuit can result in considerable financial damage.
Lawsuits happen, and without adequate asset protection, prosecutors can seize assets to pay debts. By structuring businesses, finances, and other assets, you can keep them out of reach from those looking to take them from you in a lawsuit.
#2: Major Savings on Yearly Taxes
Business owners with an income of at least $100,000 to $150,000 can save thousands in self-employment taxes. By implementing asset protection strategies to properly structure your investments in real estate, stocks, and other ventures, you can greatly increase your savings in federal and state taxes. One such example is the suggestion to hold real estate for at least one year after purchase and to sell when your personal income is at its lowest. These two tips, along with a handful of others, are great ways to reduce capital gains taxes. Real estate investment expert Jackson Cooper admits “taking a few extra steps may allow you to maximize profits further without attracting extra IRS attention.” These are great things to consider when planning your financial future and business owners really benefit from the knowledge and experience of asset protection specialists.
#3: Ensure Complete Succession of Assets
Assets are subject to taxes and probate after the owner dies. Depending on asset structures, this could mean successors may inherit only 50% of the total amount of all assets.
Many people believe a written will protects successors and their inheritance: this is untrue. A written will does not safeguard assets from taxes and probates. The only way to ensure successors receive as much as possible from a deceased person’s assets is to set up a structured trust. The structured trust must be set up in a specific way to reduce tax liabilities for successors.
Asset protection specialists are experienced and knowledgeable in structuring assets for protecting against lawsuits, and saving money in tax liabilities for the people, business owners, and successors.