The number one wealth preservation rule: Protect your assets
No matter what you financial situation is, there's nothing more devastating than seeing the Sheriff auctioning off your business, home and other assets because you lost your job or a business venture you put your heart, soul and life-savings into went bad.
That's why it's vitally important to make sure your assets are protected from creditors in the event of any unforeseen eventuality like insolvency, disability or divorce.
There are a number of options you might consider to protect your assets from creditors.
Three options you might consider to protect your assets
These options vary in cost and effectiveness:
1. Protect your assets from creditors if you become insolvent, disabled or divorced
Through effective estate planning, you’ll create an environment that would protect your assets from creditors while you’re alive and after your death.
2. Make sure your estate goes to your beneficiaries
You should provide an environment that’ll allow the smooth transfer of your assets to your beneficiaries. And an environment that they can continue to benefit from these tax saving opportunities.
3. Legally minimise the taxes and other deathbed expenses
A Trust is the best way to legally minimise taxes and other deathbed expenses. This is because a Trust separates you from your assets. If your assets were sitting in a Trust, or a number of Trusts that are linked together, your personal estate would be worth very little so your deathbed expenses would be minimal.
It’s almost impossible to achieve all three of these when you run your financial affairs in your personal name. If you run your financial affairs in your personal name, you’ll arrange the disposal of your estate on your death via a Will.
It’s extremely important to update your will often. This will make sure that you assets go to the right people in the way that you want it to happen. If you don’t have a Will, your estate (assets) will transfer according to the laws of intestate succession.