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EO102 288615 5/14. | 1. Asset protection: Preserving your net worth. We protect our homes, cars, valuable possessions — even household appliances What about our wealth?. Lawsuits target “deep pockets”. “How a jury decided that a coffee spill was worth $2.9 million”

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  1. EO102 288615 5/14 | 1

  2. Asset protection:Preserving your net worth • We protect our homes, cars, valuable possessions —even household appliances • What about our wealth?

  3. Lawsuits target “deep pockets” “How a jury decided that a coffee spill was worth $2.9 million” Wall Street Journal, September 1994 “Mall sued over squirrel attack” Chicago Sun Times, August 2006 “N.J. woman hit with ball sues Little League player” USA Today, June 2012

  4. Are your assets at risk? • Do you own a home? • Are you in a high-risk profession? • Do you own a business? • Does your business have employees? • Do you own rental property or real estate investments? • Do you have significant personal savings or other valuable assets? • Do you drive a car often? • Do teenage drivers live with you? • Do you have pets?

  5. A critical part of a financial plan Investments Saving for retirement Funding education Comprehensive financial plan Minimizing taxes Insurance Planning for income in retirement Asset protection Estate planning

  6. A two-part plan to protectyour assets

  7. What asset protection is NOT • An excuse or vehicle for evading taxes • A method for hiding assets • A way to defraud creditors Source: Asset Protection Planning Guide: A State-of-the-Art Approach to Integrated Estate Planning, Barry S. Engel, David L. Lockwood, and Marc Merric.

  8. Build your protection plan This material is for informational purposes only. It should not be considered legal advice.You should consult with an attorney to determine what may be best for your individual needs

  9. Start with the basics • Identify and correct property risks • Review your insurance coverage • Purchase umbrella liability coverage • Apply for a homestead exemption • Be careful when titling assets • Identify and correct any potential risks associated with property and real estate • Maintain positive personal and professional relationships

  10. Are your retirement savings protected?

  11. How college savingsare protected Federal protection in the event of Chapter 7 bankruptcy filing Point of contribution 1 year 720 days

  12. Is your business putting personal assets at risk? Business owners may be at risk of legal claimsby patients, customers, or employees Without a formal business structure,your personal assets may be at risk Select a method of ownership for your business to make it difficult — or expensive — for someone to access your assets

  13. Structuring your business

  14. Insulate “hot” real estate assets Separate LLCs can insulate risky assets from personal assets LLC #2 LLC #1 Apartment building Summer rental cottage Personal assets • Primary residence • Bank accounts • Investments • Personal belongings Liability for one property won’t affect other properties or personal assets LLC #3 Commercialreal estate

  15. Example: Using leasing and multiple LLCs to protect assets LLC#1 Equipment Equity in these assets is NOT contained in the medical practice, where it could beat risk Medical practice The medical practice leases office space and equipment from the LLCs LLC#2 Real estate

  16. Using trusts to protectyour assets

  17. Your action plan • Meet with your financial advisor • Review current assets and determine your net worth • Take care of basics, such as insurance coverage • Identify and minimize any prevalent risks • Consult with an attorney

  18. EO102 288615 5/14 | 19

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