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Three Key Approaches to Protecting Your Assets in 2022

Three Key Approaches to Protecting Your Assets in 2022

Asset protection is a decidedly unglamorous undertaking. But, it is a crucial one for the long-term health of you and your family’s finances. This is especially true in 2022 when a steeply rising rate of inflation threatens to decimate the value of your holdings. But what can you do to ensure you are protecting your assets? After all, you want to make sure they are kept safe, both from inflation and in general.

Trusts

Trusts are one of the most essential forms of asset protection. They come in a variety of forms and with a wide range of benefits to those that form them. In essence, a trust is a legal framework by which a specific tranche of money or assets is protected and controlled.

In placing money into a trust, you can legally define how to handle that money. That is to say, who is allowed to access it, and under what conditions it can be accessed. This way, the money you intend to give to specific beneficiaries is protected from the actions of others. Or, it will be kept safe until said beneficiaries are of age.

There are also significant tax benefits to the opening of a trust. As the trust is technically in ownership of any property or assets given to it, the value of these properties is removed from inheritance tax calculations for your wider estate. The same principle applies to offshore trusts, which provide a second degree of protection from creditors.

Estate Planning

There has been mention of your estate already – referring to the totality of your possessions and holdings, to be distributed in the event of your death. Much of asset protection is long-term. This is to ensure that your value is safe for the next generation to come. Estate planning is the process of protecting your assets for the long term, using a variety of methods to safeguard your assets and the value of your savings.

Estate planners will identify areas where you can save money using trusts to reduce any inheritance tax obligations. But they will also assist in the diversification of your savings and investments. Thus, finding a balance between security and yield to deliver a growth-based long-term savings strategy.

Business Entities

Much in the same way that a trust can be used to divest your assets of certain tax obligations, business entities can work for businesses. Use them to protect money and assets from personal troubles. Additionally, you can protect your personal assets from business-related issues, whether legal disputes or credit obligations.

The private limited company (Ltd) is the most common form of business structure in the UK. It strictly separates personal assets and obligations from business assets and obligations. If your business folds, you are protecting your personal assets. Plus, you cannot be compelled to bail out your business personally.

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