Family Wealth and Ways to Keep It

Family Wealth and Ways to Keep It

Preserving wealth is the keystone of all financial planning.

When planning an estate, it is especially vital, as it touches on the fundamental reason why people worked so hard to achieve and build up their portfolios in the first place: to have something to leave to loved ones and worthy causes. Let’s examine some strategies for achieving this fundamental goal.

In certain cases, retitling assets to protect them from legal action – far too common after the will is read out, if not before – can be a wise course to follow. This approach isn’t a universal cure-all, but it works with certain types of assets, like the family home. In some states, you can use the tenants-by-the-entirety strategy to immediately transfer your home to the surviving spouse when you die, protecting it from seizure by your creditors.

Certain kinds of retirement plans are also protected against legal action, but once again, state regulations hold sway. Consult with legal specialists if you aren’t precisely sure of regional peculiarities and requirements.

Life insurance lump-sum payments are a good way to pass on wealth to heirs without an excessive tax bill. Property, casualty and liability policies are all particularly resistant to legal assaults.  In many cases, unusual vulnerability to future lawsuits, particularly the vulture-like, frivolous variety, can be anticipated and entrenchments dug in the form of liability insurance.

Some clients can benefit by transferring their assets to an irrevocable trust. The trust becomes the owner, thereby shielding its holdings from legal action, reasonable or otherwise, directed against its founder. This works even if you are a beneficiary of the trust, although anything the trust disburses into your hands could be subject to fulfillment of a legal claim.

For more information, please read:
5 Strategies To Protect Family Wealth | Forbes


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