Secure Your Wealth: 3 Keys to Long-Term Wealth Preservation

August 17, 2023

 In today’s ever-changing world, protecting and preserving your wealth for long-term financial security is more important than ever. As a financial advisor, I’ve had the privilege of helping countless individuals and families, and one common question that comes up is, “How can we make our money last in this economy.” I like to break down wealth preservation into three tiers. All three play an important role in building a financial plan that can safeguard your assets when times feel uncertain. 

Preserve Your Personal Assets

Build a Strong Legal Framework. Establishing a strong legal framework that will shield your personal and business assets is key to ensuring you are properly protected. No one wants to find themselves on the wrong side of a claim or lawsuit, but knowing you are protected will provide peace of mind. Asset protection strategies such as trusts, family limited partnerships (FLP) and limited liability corporations (LLC) allow you to retain control of your assets, while reducing transfer taxes and protecting your beneficiaries.

Make Sure You are Adequately Insured. Ensuring you are adequately managing your risk with insurance is key, and you would be surprised how many families I work with that come to find out they are under insured in certain areas. After all, you cannot grow or preserve your wealth without protecting it. You and your beneficiaries may face many unforeseen circumstances that can quickly erode your wealth, such as lawsuits or accidents. A comprehensive insurance policy that includes property insurance, liability coverage, and umbrella insurance can give you the peace of mind that you and your beneficiaries are protected from life’s uncertainties.

Protect Your Business

Develop a Business Succession Plan. It is not uncommon for a business owner’s heirs to lack interest or suitability in running the company. Planning for inevitable changes in ownership and management is essential to ensure the continuity and sustainability of your business. I have guided dozens of business owners through the business succession planning process to identify their business’s future owners and managers, clarify their roles and responsibilities, and outline the transfer of ownership or management roles. Preparing and outlining a detailed plan for succession can help your business continue operating, while preserving wealth for your beneficiaries.

Evaluate Entity Classification. If you own a business, establishing the right entity structure is one of the best ways to set yourself up for success. Proper entity classification can minimize taxes, prevent exposure to liability, and improve asset protection – and ensure asset protection, reduce tax liability, and facilitate smoother transfers of ownership for overall succession planning. Working with experienced tax advisors who actively collaborate with financial advisors – or better yet – working with an integrated firm (like ours) that considers your tax exposure at all times is key. This can help to ensure that your entity classification aligns with your wealth preservation and tax planning goals.

Plan to Leave a Legacy

Create an Estate Plan. Some may procrastinate talking about estate planning because it’s not an easy topic and forces you to make tough decisions about how to divide assets and who will care for your children. However, having no plan can result in default decisions that don’t reflect your wishes or cause delays in the distribution of assets to your heirs. A will, a trust, and other important estate planning documents can help safeguard your wealth for your family and the causes you care about. For families who have a small number of assets, a will might be fine. But if your family has more complex needs, or you have a business or investment property, it’s often best to have your estate planning attorney and financial advisor collaborate on the structure that’s best to support your values and long-term goals.

Plan For Philanthropic Giving. By developing a charitable giving plan, individuals can support life causes that are important to them and leave a lasting legacy. Charitable giving is an important time to involve both your financial and tax advisors to minimize tax liabilities. Gifting shares of stock rather than cash allows you and the charity to avoid paying gains. So, when you want to make a donation, we can review your portfolio for a highly appreciated stock.

Stephen O’Neill
Senior Wealth Advisor and Shareholder

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