Asset Protection Strategies

Asset protection planning involves analyzing a client’s liability exposure and implementing appropriate strategies to protect the client’s financial security. Such planning becomes all the more important for elderly clients who are no longer creating wealth and would have less time to reacquire wealth if their assets were subject to a catastrophic claim. The elderly client’s assets may be depleted or seriously eroded if they are available for the payment of claims of creditors and liability judgments. Liabilities may arise as the result of divorce, debts, or lawsuits associated with the ownership of property. Older clients with more diverse assets and a higher net worth may be subject to a higher degree of risk. Clients who might typically fall into this category would include:

Individuals who are particularly vulnerable to liability suits due to their profession.

Business owners who operate as sole proprietors, in a partnership, or who conduct business in their corporations or limited liability companies in such a manner that the corporate veil could be pierced.

Individuals who serve as corporate officers or directors and could be help personally responsible to the shareholders and certain creditors, or who could be held accountable by the regulatory agencies.

Individuals who have sold their business and who are concerned about subsequent buyer claims.

A spouse with separate assets who wants to protect those assets in the event o f a divorce of from the creditors of the other spouse.

Monitoring the Plan in Financial Process

A vital part of the financial planning process is the regular monitoring and adjustment of the plan. Any plan is based on a variety of assumptions about the future. No plan can be completely accurate because there are too many variables and unknowns that will affect the actual results. The plan is a benchmark that the client can use to measure whether he or she is still on the right path. Regular monitoring and adjustment should help ensure that the client does not stray too far from the path and risk financial catastrophe.

Personal Property Insurance (Prepared Questions)

I always consider these following questions when I secure a personal property insurance for me to lead through the right step of getting such an insurance. Here are some of what I have prepared:

1. Do I need to have a homeowners policy in force of all dwellings?
2. If no, do I have another method of insuring my residence(s)?
3. Is the dwelling coverage adequate to replace each dwelling at its current value?
4. Is the proper form of insurance in place to cover all dwelling, vacation homes and rental property?
5. Does the policy contain an inflation-adjustment rider?
6. Has the dwelling coverage been reviewed by an insurance professional within the last year?
7. Are there any policy exclusions that may prove detrimental to the client?
8. Is the personal property coverage adequate for the value of the client's personal assets?
9. Does the policy provide replacement value coverage?
10. Are items of special value itemized under a personal property endorsement or personal articles flutter?
11. Is the liability coverage large enough to quality for an additional umbrella liability policy?

Social Security Death Benefit

When a fully or currently insured worker dies, a on time lump-sum death benefit of $225 may be paid. The benefit generally must be applied for within two years after the worker dies. The benefit is paid to the surviving spouse who was living in the same household as the deceased worker at the time of the decedent's death. If there is no such surviving spouse, the benefit is paid to the surviving spouse (excluding a divorced spouse) who was not living with the worker, but who is eligible for benefits based on the deceased worker's primary insurance amount (PIA). If there is no surviving spouse, payment may be made to the deceased's parent entitled to benefits. If there is no surviving spouse or parent, the payment is divided among children who are eligible for benefits based on the deceased worker's PIA. The lump sum will not be paid if there is no qualifying surviving spouse or children.

Income sources other than government benefits.

The major sources of retirement income, other than government benefits, are pension plans, individual retirement account (IRAs), annuities, investments and post retirement employment. The planner must identify each potential source of income and determine whether the income will meet the client's retirement needs, goals and objectives. If the income is not sufficient, the client's primary asset, the home, may need to be sold. The planner must also understand the timing and mode of distributions from qualifies plans, IRAs and annuities, as the rules are complex. The planning process should involve an analysis of the income tax consequences of each potential element and should be designed to take full advantage of the favorable income tax provisions available for the older client.

Monitoring the plan (Planning Process).

A vital parts of the financial planning process is the regular monitoring and adjustment of the plan. Any plan is based on a variety of assumptions about the future. No plan can be completely accurate because there are too many variables and unknowns that will affect the actual results. The plan is a benchmark that the client can use to measure whether he or she is still on the right path. Regular monitoring and adjustment should help ensure that the client does not stray too far from the path and risk financial catastrophe.

Retirement Setting

Financial planning is a serious process in whatever financing needs and approaches. In fact, older individuals who are planning for their retirement years often face unique needs and considerations. Their income will no longer be dependent on their labors but will generally come from investments and government and private benefit programs. Their income needs are affected by changes in their lifestyles and health. Disability or incapacitation are feared threats to their independence and quality of life. Finally, they are faced with the desire to transfer their wealth to succeeding generations while minimizing the impact of income and estate taxes. Therefore, retirement goal setting is affected by a combination of financial and personal issues.