How to Protect Your Assets

Wealth preservation attorney offers simple tips to recession-proof your money and protect against the current economic threats
September 23, 2008 10:35:00 AM PDT
In the wake of the sub-prime mortgage scandal, the failure of small and major investment banks, the global markets in turmoil and more and more job losses every month, many people are panicked about protecting their future and keeping their money safe. Katarinna McBride, Wealth Preservation Attorney with Beermann Swerdlove LLP says the credit crunch is affecting everyone, regardless of their income or wealth. "We have been inundated with inquiries about what people can do to protect their financial future. There are a number of steps people can take to weather the storm of this current economic crisis and ultimately protect their finances," she adds.

Katarinna says you can following these five financial tips to help protect your cash and assets in a down turning economy.

1. Pay yourself first: If we treat ourselves as any other creditor, then we would make payments to our own accounts on a regular basis -- just as we pay our own bills. After paying your bills, send all excess to this account and allow yourself to only withdraw 50% of the amount in that account. You will then save 50% of your take home -- a huge saving opportunity. If you need to withdraw more, treat the withdrawal as a short term loan available only for limited categories, such as medical expenses or family-related expense.

2. If you struggle to save, request higher income withholding: I wouldn't normally recommend this, but for those who struggle, or are not disciplined enough to save, this can be a helpful strategy. Have your employer withhold higher amounts for income taxes. Although the government has interest free use of your money during the year, once you get it back via a tax refund, you can treat it as a windfall to be immediately funneled into your savings account. (This may backfire if you are tempted to use that tax refund for things other than debt payments or savings.)

3. Continue to invest in your retirement: Building savings in a tax deductible and/or tax deferred retirement accounts is the closest you can get to free money. When matched by an employer, such as a 401K account, it is a HUGE incentive to participate in such programs. Of course, you may need to weigh your ability to do so against more pressing financial obligations. Also, if you do find your self in trouble, most retirement accounts are exempt from creditors ? even if the judgment is against you. It can pay -- in more ways than one -- to fully fund your retirement accounts.

4. Check Your beneficiaries: Make sure you have designated beneficiaries for your retirement accounts, life insurance and your estate. Without a beneficiary, state law controls how your assets will be managed. Generally, a court proceeding will be necessary to pass the asset to the beneficiary. If you are divorced and have failed to remove your former spouse as a beneficiary, in many states, they will remain the beneficiary despite your divorce. The law presumes that you meant to keep your spouse as the beneficiary.

5. Update or create an estate plan: Regardless of your income, or the amount of your assets, everyone still needs a will. There has never been a more crucial time to plan for your future and document decisions about your family and finances. Not having one is the perfect way to lose control over the money and assets that you do have. You simply can't afford not to have an estate plan -- do you want the state to make these decisions for you?

ABOUT BEERMANN SWERDLOVE LLP:

Founded in 1958, Beermann Swerdlove LLP is one of Chicago's Premier Full Service Law firms. With award winning attorneys regarded as some of best the country, the firm continues to represent an array of high profile businesses and individuals including Michael Jordan, Frank Thomas, R Kelly and more. Specializing in family law, the firm also provides legal services in the areas of Business Counseling and Commercial Transactions, Commercial Litigation and Appeals, Employment Law, Personal Injury and Estate Planning and Probate, Their attorneys are experienced legal commentators that have shared their expertise on both local and national television programs including MSNBC, Fox News Channel, CBS, Fox & NBC. For more information visit www.beermannlaw.com


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