Some Asset Protection Strategies

Ifyou come into a sudden windfall, you need to consider strategies to protectyour newfound wealth.  Here are six assetprotection strategies that will help shield your wealth:

1. Increase liabilityinsurance.  Before receiving thewindfall, increase your personal umbrella liability coverage to an amount equalto your net-worth.
2. Keep assets separate.  If you have children from a previous marriageor are contemplating a divorce, it’s best not to commingle assets.
3. Protect yourself fromtenants.  If you have rentalproperty, create a business entity to shield your other assets from disgruntledtenants.
4. Reconsider jointly-heldaccounts.  Any money in a jointaccount is at risk if the joint owner divorces, incurs a tax lien, or issubject to a lawsuit judgment. 
5. Formalize informalpartnerships.  Form an entity such asan LLC or corporation that will provide you with greater legal protection.
6. Create businessentities.  If you operate a sole proprietorship,all of your personal assets are at risk. Shield personal assets from lawsuits by creating a business entity.

See Robert Pagliarini, 6 Asset Protection Strategies to Shield YourWealth, Chicago Tribune, Nov. 5, 2013.