While asset protection is important for many individuals, it is particularly important for high net worth families. Asset protection strategies for these families should account for the fact that there is often much at stake. A recent article discusses how the wealthiest families are protecting their assets.
In order to begin the process of asset protection planning, a family must first consider the range of risks that they may face. Often, wealthy families are threatened by business liability, personal liability, risks to assets, and health care risks. Many become targets because they are perceived to have “deep” pockets.
One common way wealthy families protect themselves is through the creation of business entities to hold valuable assets. Families who own investment properties, for example, often create a separate business entity for each investment property. If a person slips and falls in one of the investment properties held by a limited liability company (LLC), the person would only be able to pursue the assets located in the limited liability company, rather than the individual’s personal assets.