Asset protection is simply a strategy designed around keeping your assets safe from things like certain legal situations. Asset protection planning is defined as taking assets that are subject to creditors’ claims (non-exempt assets) and repositioning them as assets that are out of the reach of creditors’ claims (exempt assets). For most of pre- and post-retirees out there, protection of principal is a strong desire and an important financial objective. So, what does asset protection planning really mean for you?
Well first, it’s important to begin the asset protection planning process as soon as possible if you believe your personal assets could be exposed to creditors now, or in the future. Trying to move your assets after a legal proceeding has already begun is usually too late. Before putting together your comprehensive asset protection plan, it’s important that you review and integrate two important goals: Your short/long-term financial goals, and your estate planning goals.
The first step is to list all current and future sources of income. Next, determine how much money you’ll need when you retire, and what will be left over to pass on to your heirs through your estate plan. After this is completed, you can begin to piece together your financial plan where you’ll review all current assets to determine if they are exempt from creditors. Those that are not can then be repositioned to become exempt. Additionally, don’t forget to have an asset protection plan in place for future asset acquisitions.
When your financial plan is in place, you can estimate your current net worth and how much wealth you expect to accumulate in the future. You should also create a comprehensive estate plan to address issues such as who will take care of you and your assets if you become incapacitated, who will take care of your minor children upon an unexpected death, and who will take care of your spouse and family after you die. Certain advanced estate-planning techniques such as irrevocable trusts or family limited liability companies can be used to help protect assets using your estate plan.
If you want to be confident in your ability to live your life while having your assets protected, then don’t wait to sit down with us one-on-one. Request your complimentary, no obligation financial review today! We’ve been helping people just like you prepare for retirement with our comprehensive planning process. We’ll cover all aspects of your retirement and help you plan for the years to come.
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Fixed index annuities are designed to meet long-term needs for retirement income. Early withdrawals may result in loss of principal and credited interest due to surrender charges. Distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax. An income rider or benefit (sometimes called Guaranteed Lifetime Withdrawal Benefits, or GLWB) is an additional feature available with some annuities and generally optional and come with additional cost. Income benefits are designed to provide income options above and beyond the standard annuitization or free withdrawal features in annuities. All contract gains beyond the CAP rate are surrendered to the insurance company to pay for the expense of the product.
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