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Accruing wealth can occur over the course of years of hard work or may result from a sudden windfall. Unfortunately, too many people become complacent after achieving financial success. They may fail to properly plan to preserve their good fortune. Acquiring wealth is only the first step toward long-term financial stability. People also have to find ways to preserve their resources for themselves and the subsequent generations of their families. Simply setting money aside in a savings account or moving it to an investment brokerage isn’t enough to truly preserve wealth.
People need to strategize in order to maximize their holdings and protect them against a variety of different risks. What are some of the most common and successful wealth preservation strategies utilized in Arizona?
Investment diversification
One of the biggest mistakes people with significant resources make is to hold their assets primarily in one type of investment. Whether they start a small business or purchase residential real estate, they need to be aware that all markets fluctuate. Investing in a variety of different types of assets can protect against the loss of wealth when there is an adjustment to any one market. People often need the help of a financial advisor to make the right investment choices.
Asset protection planning
Resources can be vulnerable not just because of the market but because of personal circumstances. Divorce or lawsuits can endanger someone’s valuable personal holdings. Asset protection planning often involves transferring the ownership of certain assets to a trust as a way of separating an individual from their most valuable resources. That way, their assets aren’t vulnerable during litigation or debt collection efforts. Asset protection planning often goes hand-in-hand with estate planning, which can help preserve resources for the next generation.
Proper insurance
There are many kinds of insurance that can protect those with sizable assets and substantial income. Life insurance, long-term disability coverage and even property insurance can all be important to protect someone’s finances and limit their liability.
Creating a customized wealth preservation plan is often the best option for those who want to preserve what they have acquired for their comfort and the well-being of their loved ones. Wealth preservation can involve a variety of different actions depending on the assets someone holds, their family circumstances and their financial goals. Contact us online or call today for a free consultation with Pennington Law, PLLC.
