How to Shield Your Assets from Financial Loss

HomeBlogAsset & Legacy PlanningHow to Shield Your Assets from Financial Loss

No one wants to think about the possibility of financial loss, but it’s essential to prepare for anything. Unfortunately, unexpected events can lead to a total loss of your assets. That’s why it’s crucial to take steps now to shield your assets from loss. In this blog post, we will discuss some of the ways that you can protect your future and keep your finances safe!

Preparation for the Unexpected Makes the Difference

Financial loss occurs when the value of your assets suddenly decreases due to many different things, such as inflation, market crashes, natural disasters, loss of a job, or even bad financial decisions. It’s essential to protect yourself from financial failure because it can seriously impact your life.

If you lose all of your assets, you may not be able to retire, pay for your child’s education, or even cover your basic living expenses. That’s why it’s important to take steps now to shield your assets from financial loss!

There are various ways to protect your assets from financial loss. 

  1. One way is to diversify your investments by investing in stocks, bonds, and real estate. This way, if one investment decreases in value, you will still have others doing well.
  2. Another way to protect your assets is to purchase insurance. Insurance can help cover the cost of repairs or replacements if something happens to your home or car. You can also get insurance to cover the cost of medical expenses.
  3. However, a third way to protect your assets covers almost every possible financial loss! Keep reading to find out more about this financial protection type.

The Highest Form of Protection for Your Assets

Your most important financial planning tool may be a trust: a legal framework designed to keep assets safe. Your asset protection and legacy planning attorney can help you choose the right trust type for your particular situation.

An irrevocable trust can shield your assets from:

  • Bankruptcy: If you place assets in an irrevocable trust long before creditors come knocking, the court can’t touch those assets to pay your creditors.
  • Costs of long-term care: let Medicaid pay for any long-term care you may need at assisted living or homecare while you keep your assets safe.
  • Medicaid Recovery: Keep your assets safe from the state trying to recoup what they spend on your long-term care. Leave an inheritance for your children and grandchildren instead—no need for them to sell the family home to pay for your Medicaid expenses.
  • Taxes: With your assets in an irrevocable trust, they are no longer part of your taxable estate. Instead, the trust pays taxes on its earnings much like a business entity would.
  • Civil suits: If someone sues you, you can lose it all! However, your assets stay safe shielded in an irrevocable trust. You’ve placed them in a legal framework that a civil suit court can’t take.
  • Divorce: Family law courts don’t count certain trusts as part of an equitable asset distribution process. However, this type of planning doesn’t start when someone decides they want a divorce.
  • Heirs with addictions often spend lump sum inheritances in no time at all. To prevent your hard-earned money from going to a shopping spree, drugs, or a gambling addiction, use a trust to mete out a portion of funds each month. You can even add conditional wording to help your heirs do what they need to do. For example, if your granddaughter Janie spends $3,000 per month on retail goods, you could place a condition that she spends $1,000 per month for 12 months before receiving monthly distributions from your trust. Your trustee can handle the details of when and how to distribute.

Bottom Line

Creating a financial asset protection plan that outlines your long-term goals can help you stay on track and make sure that you prepare for anything that comes your way! Financial and legal frameworks, including diversified investments, insurance, and asset protection tools such as trusts can help you reach your goals!

Keeping your nest egg safe and passing on an inheritance to your heirs is possible. Keeping your loved ones safe and passing on a legacy gives them a sense of your love. You show that you care enough to plan for their future with asset protection plans.

We Can Help

At Vail Gardner Law, we understand the types of trusts that can keep your assets safe from the unexpected losses that unprepared individuals face!  If you would like to discuss your financial goals with an asset protection lawyer, please contact us today!

We offer an initial consultation where we can review your financial situation and help you create a plan to reach your long-term financial goals. You and your loved ones need a plan to stay financially secure. Take steps now to shield your assets from financial loss!