Developing a well-designed North Carolina Asset Protection Plan involves (1) identifying your current risks; (2) reviewing your current assets and extent of your exposure; and (3) designing and implementing an asset protection plan to mitigate your exposure.
Various levels of asset protection planning may be used depending upon the degree of protection sought and the amount of assets at risk. Generally, our first step will be to review your liability insurance coverage, assets, and ownership structure for risk and inefficiencies.
Insurance Policy Review
All of your insurance policies should be reviewed for appropriate coverage amounts, appropriate riders, and potential coverage gaps. This may include homeowner’s insurance, automobile insurance, business insurances, flood insurance or similar, and umbrella liability insurance.
Ownership of Assets & Composition of Your Estate
Titling of all assets should be reviewed and if appropriate, titling should potentially be updated or transferred for stronger asset protection. Appropriate titling will depend on your specific circumstances. For example, for a married couple where one spouse is in a high-risk professional such as a doctor, it may make sense for some assets to be titled in the other spouse’s name. Bear in mind, however, that this can have significant marital law consequences in the event of a future divorce. In addition, if the low-risk spouse dies, the assets may end up back in the high-risk spouse’s name and at risk again.
The overall composition of your asset classes should be reviewed and potentially it may make sense to change investment strategies for stronger asset protection. This may include maximizing contributions to retirement plans, purchasing or contributing to cash value life insurance policies, or other protection strategies.