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Matthew Fassnacht explains Why Individuals Require Asset Protection
Individuals require asset protection for many reasons, one of the most common is to protect our family. Matthew Fassnacht an Investment Advisor from Atlanta, Georgia, explains that we all have a substantial amount of assets that could be breached, which could devastate our family’s stability. When an individual gets sued, typically, their liability coverage will not cover them if they lose the lawsuit because there was no insurance policy in place at the time of the incident.
What is Asset Protection?
Asset protection is a legal strategy to protect an individual's or family's assets from future liabilities, says Matthew Fassnacht. Assets such as your home, savings, and retirement accounts can be used for many purposes like education, purchasing items that will increase in value over time (i.e., real estate), starting a business, paying medical bills, etc.
Why Do Individuals Require Asset Protection?
There are several reasons why individuals may require asset protection:
They want to make sure their children receive the best possible upbringing if something happens to themselves
The government has filed liens against them because of unpaid taxes
After divorce, their spouse decides they do not want anything to do with their belongings and files bankruptcy on every piece of property that belongs only to them.
They have been sued for something they did not do or were only partially responsible for
The Advantages of Having an Estate Plan in Place
According to Matthew Fassnacht, an estate plan is a vital part of asset protection. It ensures that your wishes are carried out after you die and can help avoid disputes between family members about who should inherit what.
An estate plan also allows you to designate someone to manage your affairs if you become incapacitated. Without an estate plan in place, the state will decide who will take care of your children and how your assets will be distributed. This may not be what you would have chosen had you been given a choice yourself.
Real-Life Examples of How to Protect Your Assets
Matthew Fassnacht says that there are many ways to protect your assets, and the approach you take will largely depend on your circumstances. Some common methods are:
Creating a Trust
A trust is a legal arrangement in which one party (the trustee) holds legal title to property for the benefit of another party (the beneficiary). The trustee can be an individual or a corporation, and the beneficiary can be anyone, including pets! One advantage of using a trust as part of your asset protection plan is keeping your assets out of probate. This means they will not have to go through the court system after they die and can be distributed according to your wishes without waiting months or even years. Another advantage is that trusts offer more privacy than will do – information about trusts is not a matter of public record.
Setting Up a Corporation or LLC
A corporation is a legal entity that is separate and distinct from its owners. This means that the owner (i.e., shareholders) of the corporation are not personally liable for the debts and liabilities of the company. For this reason, corporations are popular among small business owners who want to protect their assets in case their business fails. LLCs offer similar protection as corporations but are much easier and less expensive to set up.
Purchasing Life Insurance Policies
One way to ensure your children will be taken care of financially if something happens to you is by purchasing life insurance policies naming them as beneficiaries. If they have young children, it's also important to consider purchasing life insurance policies that will protect them if they are disabled.
Probation is a legal process where someone who has died (the decedent) property must be distributed according to the wishes stated in their last will. One way you can avoid probate altogether is by creating a living trust during your lifetime through an attorney experienced with asset protection planning so that it becomes part of your estate plan. The best time for this would probably be while you're still relatively young and healthy to ensure there's enough time to get everything in order.
You can protect your assets from creditors by filing for bankruptcy protection under Chapter 13 of the Bankruptcy Code. Under this process, you work with a trustee and pay back some or all of what you owe over time (usually three to five years). However, if you own most of the property jointly with someone else, they may be able to take it if they file before you do – so both parties must understand their rights when considering such an option.
Why You Should Get A Will, Living Trust, And Power Of Attorney
Having a will is one way to ensure that your wishes are followed after death and prevent family feuds about who gets what. It ensures that at least some of your assets will go to the people or organizations you choose rather than being distributed according to state law.
A living trust is similar to a will, but it becomes effective during your lifetime and can avoid probate altogether. It's important to have an attorney draft this type of trust for you, as many specific requirements must be met for it to be valid.
A power of attorney allows you to appoint someone else to decide on your behalf if you become incapacitated. This is particularly helpful if you want someone other than your spouse or children to have authority over your finances and health care decisions.
Matthew Fassnacht believes that the goal of asset protection is to protect your assets from creditors. It's important to take steps now so that you don't have to worry later about how your family will be cared for in the event of a tragedy, which could put a burden on them while they are grieving and recovering. Consider protecting yourself with an estate plan customized specifically for you at this time when it can make a difference! We want you to sleep well, knowing your loved ones are taken care of should something happen.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes