Financial self-defense

Take a fraction of the time you spend earning money and building your business, and think about how you can protect it. Everything in life begins with a good plan. You should start at the beginning and assess where you are right now by asking yourself:

• What do I have now?
• What do I own?
• What dangers are there to my wealth?
• What have I done to protect my assets?
   

Having a self-defense plan in place is necessary whether you are rich or poor. There are a number of good reasons to seek asset protection are:

• Lawsuits
• Divorce
• Creditors
• Bankruptcy
• Tax collectors
• Foreclosure
   

There are also several myths and fallacies:

• “I have too few assets to protect” – Wealth is relative. How would you feel if you lost everything you have? It doesn't have to be a lot to be your life's savings.
• “I can’t foresee anyone suing me” – Crazy things happen, and you never know where circumstance will take you. You don’t want to be taken by surprise.
• “I can protect myself with liability insurance” – Your claim could be denied because of some technicality. You might not have enough coverage or your insurance company could simply go bankrupt.
• “It costs too much” – Most families can shelter their net worth for less than they'd pay for a modest vacation. Asset protection is an investment in your business’ future.
• “It's not moral to shield your assets” – Bankruptcy laws, exemption laws, corporations, trusts, and other protective entities and debtor-oriented laws are intended to shield wealth. Our society is based on a foundation of laws, and these laws exist to prevent bad things from happening to good people.
   

Most people simply need an effective asset firewall, something that changes as you and your wealth change and grow.

Don't overlook your intangible assets, future assets, intellectual property, inheritances, and monies due you. These often overlooked assets can have great value. Asset protection is like football. You need a defensive line that will best block a particular offensive line.

When your assets are in jeopardy through a lawsuit or legal action against you, layer your firewalls. This way, if one fails, there are still more that stand as obstacles between those actions and your assets. However, this kind of defense can be costly, which is why it should only be used when there is an imminent threat.

Finally, “bulletproof” your investments and retirement accounts, again by layering firewalls to protect them. You need to protect your estate.

Why work a lifetime to accumulate and safe-keep assets only to lose them after you die? Estate planning goes hand-in-hand with asset protection planning.

Hillel Presser and Arnold Goldstein are asset protection attorneys and cofounders of Presser/Goldstein LLC in Deerfield Beach, Fla.