Step 5: Wealth Preservation

Step 1  |  Step 2  |  Step 3  |  Step 4  |  Step 5 

Insurance
Forget what you know, or what you think you know about insurance. No matter what you’ve been told, there is one reason and one reason only for buying insurance – to protect against financial loss. If there is no potential for financial loss, you simply do not need any insurance. Financial losses can occur if you die, are injured or become sick. They can also be incurred if your property is damaged, destroyed or stolen, or if you get sued. You must protect yourself financially in case any of these events occur. The best way to do this is by purchasing insurance to protect the amount, value of the asset that is at risk.

There are many types of personal insurance in the market, such as:

  • Life Insurance
  • Disability Insurance
  • Critical Illness Insurance
  • Travel Insurance
  • Group Insurance
  • Professional Insurance
  • Business Insurance

Trusts
A trust is a formal arrangement wherein the legal owner of assets or property (called the settlor) transfer them to the care of a trustee, who is appointed to manage them according to the rules of the trust agreement on behalf of the assets’ ultimate beneficiaries. Thus, a trust has four components: Property, Settlor, Trustee and Beneficiary.

A trust is something that could last for many years, so you should seek out the help of a qualified professional when setting one up.

There are many types of trusts such as Assets Protection Trusts, Business Trusts and Family Trusts. The main one for Estate Planning is the Family Trust.

The Family Trust is one that is created during the settlor’s lifetime. They can be useful in the following ways:

  • To protect assets from creditors
  • To minimize probate fees
  • To minimize the income taxes due upon death, by freezing the value of investments, the shares of a business or other assets.

In general, trusts protect your assets from the possible erosion of taxes or liabilities.

Estate Planning/Structure
It is a common misconception that estate planning is only for the wealthy. A lot of people also believe that estate planning is an exercise to protect your assets when you are dead. Not so if you plan for your estate properly. You can manage your assets a lot more effectively while you are still alive and have a lot more left over to pass on to the future generations after you pass away.

There are many ways to structure your assets in order to minimize tax and maximize growth legally.

Protect your wealth and pass it on to the next generations!

To learn more about the 5 Steps, book an appointment with one of our financial strategists today!