Regardless of your stage in life, growing and preserving your wealth should be an ongoing priority. These 10 tips can help lay the course for your financial future.
Preserving personal wealth
Wealth preservation is a strategy designed to grow your assets while providing a legacy for your family. There are a variety of investment plans that are all aimed at securing your wealth for the long term.
1. Get your legal house in order.
Bad things happen to good people every day, so it’s important to draft a will in the event of your death. You should also have a living will, or advance medical directive, to make sure that your wishes are honored regarding the medical treatment you want or don’t want if you’re incapacitated. You will need a durable power of attorney for health care so that a designated person can make decisions in circ*mstances that aren’t covered by an advance directive.
2. Insure, insure, insure. Make sure you are adequately insured.
- Consider life insurance for income replacement and goal funding, such as a college education for young children, to take care of your family. You can mix term insurance and permanent insurance for a lower overall cost.
- Disability insurance is another must — over the course of a career, a person is more likely to have a long-term disability than die.
- Liability umbrella insurance offers additional liability coverage to protect assets, wages and investments from damages that go beyond what other policies cover.
3. Monitor your accounts.
Bad actors abound, and data breaches are becoming more common. To keep them at bay and protect your identity, monitor your credit score and conduct an annual credit check.
4. Establish creditor protections.
Protecting assets from creditors is often done via trust. State laws vary, so legal advice is recommended.
Business model thinkers consider the art of the possible, They understand the role of technology in their company’s business and industry, as well as adjacent industries, to provide broader context around the impact of technology on business and revenue growth.
Protecting the business
A successful business is an important asset that can provide for you and your family. It’s important to safeguard its operations.
5. Business succession planning.
It’s not unheard of for a business owner’s heirs to be uninterested in running the company — or simply unsuited for it. Business owning families may consider a buy-sell arrangement specifying how co-owners or co-shareholders can purchase your shares when you retire or die. Arrangements can come in many forms and may contemplate a cross-purchase, redemptionsand/or can be supported by life insurance.
6. Opt for key person insurance.
Another reason for life insurance is to reduce the possibility that the business fails following the death of a person key to company operations.
7. Weigh entity classification.
Choosing an appropriate entity structure can make the business more valuable and flexible.
- When forming a business, consider how third-party investors, employees or a founder’s trust can be owners, even when such things may not occur for three to five years into the future. It will be less costly to do it up front versus a complicated reorganization of a going concern.
- Consider owning business real estate outside of the operating business so that the business can be sold while the real estate is retained and leased to the buyer for an income stream.
