Would you like more control of your finances? The first thing you’d need to do is to actually create a plan. And then, you need to keep your goals and purposes in mind as you invest. But that’s just the beginning. Read on for two more of the six key elements you need to deal with before you can be assured you’ve covered the basics.
These two keys are absolutely essential, yet many people are reluctant to deal with them because doing so makes them uncomfortable. No one likes to think about dying, and no one likes to think about getting sued.
Yet the first one is unavoidable – we all will die, sooner or later. And when that happens, hopefully very far into the future, you’ll want to make sure your assets will go to the people or causes of your choice, not the court’s choice. And the second issue, getting sued or losing assets due to situations beyond your control, is actually more likely to happen than you might think.
1. Get Your Estate in Order
Do you have a will? You really need to have one. You’ll also need to set up durable powers of attorney and health care directives. I realize that this might be an uncomfortable topic, but do it anyway.
If you don’t, the courts will determine what to do with your assets. Do you really want them to decide who should get your stuff? I didn’t think so.
And if you have significant assets, you will want to look at revocable living trusts and other entities as well to ensure that your heirs will actually be able to benefit from the fruits of your hard work.
2. Protect Your Assets
Asset protection is another topic we’d rather not think about. But the fact is, that there are many risks that could endanger your wealth: premature death or disability, taxes, inflation, adverse economic conditions, lawsuits and more.
Unless you want to risk losing it all, you must take the necessary precautions to protect any assets you have accumulated. You can do that by using the appropriate asset protection tools such state and federal statutes, legal structures, and insurance.
This can be as simple or as complicated as you choose, depending on the level of protection you desire. The more assets you have, the more important it is to protect them from as many risks as possible.
Since getting sued is a big risk in this current society, here’s a very cool additional benefit of proper asset protection: It may be much more difficult or even impossible for the other party to collect a judgment if a lawsuit doesn’t go your way. And that prevents you from looking like a desirable target. Most attorneys work on a contingency basis, and if they’re unlikely to collect, they may refuse to get involved.
And regarding insurance, can you survive without your spouse or business partner? Do you have enough cash to cover the bills if you can’t work? Have you reviewed all of the risks you’re currently taking to determine if you want to accept that risk or transfer it to someone else? These are very important questions that need to be answered if you really want to protect your assets.
How you choose to structure your estate and business activities will have a significant impact on your overall financial success. The better you plan and execute, the more you will be able to enjoy the benefits of your work.
P. Christopher Music –
About the Author:
After 15-plus years of being a financial planner, Christopher Music decided there had to be a better way. Witnessing financial debacles of big industry and government-driven economies caused Christopher to take action, developing an instrument that measures the success of any financial plan. The Financial Security AnalysisTM (FSA) is the back bone of Music’s firm, Wealth Advisory Associates (WAA). WAA is a financial planning firm focused on helping private-practice physical therapists understand and implement the most effective strategies to achieving financial success and security. Visit www.wealthadvisoryassociates.com