5 Roles of Asset Protection in Wealth Management

8 March 2022
 Categories: , Blog


Are you worried your wealth is vulnerable to different risks? Wealth depletion can happen because of threats from political upheaval, legal suits, family mismanagement, adverse taxes,  and inflation. Asset protection is a legal term that refers to taking steps to safeguard one's assets from these threats. Asset protection is a key pillar of wealth management to ensure longevity and growth. So, what role does asset protection play in ensuring your wealth is sustained?

1. Reduce Estate Taxes 

Estate taxes are one of the biggest risks to a person's wealth. This is why every generation should strive to minimize their estate and gift taxes. This can be done with a proper estate plan. By implementing an estate plan, you can ensure your assets are transferred to those who deserve them without being overly taxed. 

2. Protect Cash Deposits Against Inflation    

Inflation is another threat that eats into a person's wealth over time. This is why it is important to invest in assets that protect against inflation. For example, investing in an annuity or other insurance products can protect your cash deposits from inflation. 

3. Reduce Legal Liabilities       

Legal liability can also eat into a person's wealth. This is why a wealth management plan should strive to reduce legal liability. This can be done by properly assessing different exposures in both business and family dealings. It enables mitigation of these legal risks and stays one step ahead of those who may want to institute various legal suits against the estate.  

4. Protect Assets Against Wasteful Heirs    

Another threat that eats into a person's wealth over time is the threat of wasteful heirs. This is why it is important to set up proper structures to oversee wealth management by beneficiaries. Setting up a trust is a popular method to do it.

A trust can ensure your beneficiaries get what is due to them without being charged with the responsibility of handling assets. In addition, this arrangement ensures wasteful beneficiaries don't pose a danger to your wealth. 

5. Mitigating Political Risks 

Political risks can also eat into wealth and sometimes wipe it off. For example, a hostile government can target people because of their political beliefs and seize their assets. A government can also impose unpredictable and adverse taxes on specific assets. A wealth management planner can mitigate these risks by setting up safe havens to protect these assets. This way, your wealth is beyond the reach of hostile powers. 

Would you like to cement your legacy and ensure your wealth keeps growing? Then, book an appointment with a wealth management planner to start securing your wealth. 

To find out more, contact a wealth management company such as Horan.