When people hear the term “asset protection,” they often think it only applies to the super-wealthy. But in reality, families with modest savings, a home, and a steady income are often more vulnerable. A lawsuit or unexpected event can cause serious financial damage that might be hard to recover from.
The key to protecting what you’ve built is planning ahead – before something bad happens. Asset protection isn’t a one-time task, either. As your life, assets, and family circumstances change, your plan should be updated too.
Here are four effective ways to help shield your family’s assets:
1. Insurance Coverage
The first layer of asset protection starts with insurance. You likely already have health, auto, and homeowner’s insurance – but are your policies enough? If you’re ever sued, even if the claim is baseless, defending yourself in court can cost a lot.
Insurance doesn’t just help cover damages. Your insurer also provides legal defense, which can save you thousands. However, your policy may not cover everything. That’s why I often recommend an umbrella policy, which adds extra protection when your basic coverage maxes out. I can help review your policies and make sure you’re covered where it matters most.
2. Legal Exemptions
Federal and state laws protect certain assets from creditors – but only if you use them properly. These exemptions vary by state but often include protections for your home (called a homestead exemption), retirement accounts like 401(k)s and IRAs, life insurance, and annuities.
For example, if your state offers strong homestead protections, paying down your mortgage could be a safe way to protect equity in your home. These exemptions are powerful tools, and best of all, they don’t cost you anything to use – they just need to be part of a smart overall strategy.
During a Life & Legacy Planning Session, I’ll walk you through the exemptions available in your state and how to use them wisely.
3. Setting Up the Right Business Entity
If you run a business – even a small side hustle – you need to protect your personal assets from business risks. If your business is a sole proprietorship or general partnership, you are personally liable for business debts or lawsuits.
The good news is that forming a Limited Liability Company (LLC) or S-Corp can protect your personal finances. These entities create a legal wall between your business and your personal assets. If something goes wrong, your personal savings, home, and investments are shielded.
If you have any kind of business, let’s talk about the best structure for your needs and make sure it’s set up – and maintained – correctly.
4. Estate Planning
While the first three strategies protect you from “what-ifs,” estate planning protects your family from a certainty: your death or incapacity. Life happens. And when it does, you want your family to be cared for and your assets handled smoothly.
That’s where proper estate planning comes in. A solid Life & Legacy Plan doesn’t just include documents – it creates a clear roadmap for your family. It helps avoid court, reduce stress, and ensure your wishes are followed. It’s the ultimate act of love and responsibility.
Let’s Make Sure You’re Protected
You’ve worked too hard to leave your family unprotected. As your attorney, I’ll help you create a Life & Legacy Plan that gives you peace of mind today – and protects your loved ones tomorrow.
At Cheever Law, we don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love, starting with a valuable and educational Life & Legacy Planning Session. This will allow you to get more financially organized and make the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.
To learn more about our one-of-a-kind systems and services, contact us or schedule a no-obligation 15-minute introductory phone call today.