If you own substantial assets or are coming into a sudden windfall, such as an inheritance, proceeds from a lawsuit, stock options sale, or business sale, there are some money moves you might look at for protecting your newfound wealth.
Your first line of defense against potential litigation will likely be insurance in the form of an “umbrella policy.” Your financial professional can help with the right coverage but be prepared for a policy that’s at least equal to your new net worth. Getting liability insurance is generally a relatively inexpensive way to avoid losing significant assets in lawsuits.
The manner in which you own your property is worth a conversation with a financial professional. Different situations will determine if it’s best to keep your newfound wealth in a joint account or separate. In many states, a form of joint ownership known as “tenancy by the entireties” means that property owned by both spouses can’t be partitioned.5 Loosely explained, if your spouse is sued or a creditor comes after them to satisfy a bill, under most circumstances they can’t seize jointly-owned assets to satisfy the judgment.
Protect yourself from personal liability in the event of an unexpected lawsuit. For example, consider creating a business entity that can help shield your assets if you own rental property. Your personal assets are for the most part protected if you find yourself in a lawsuit. However, an LLC can only protect assets related to its purpose. So, if you put your personal residence in the LLC and a guest is injured, it wouldn’t protect you from liability because your home has no business function.
Protect your assets from your creditors and the creditors of your beneficiaries by setting up irrevocable or lifetime marital trusts. This process comes with specific rules, so work closely with the right advisor during setup.
Protecting what you own is important and doing it correctly is even more important, so if you’re expecting an influx of money, it’s time to talk. We may be able to help or point you in the right direction, so call us today at (540) 720-5656.
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Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. Megan is also a fully licensed Life, Health, and Annuity agent. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.