People often spend their entire lives endeavoring to build wealth. But wealth can be lost unexpectedly in a moment. What can you do?
It would be tragic to you and your family to lose the wealth you have carefully built over a lifetime. Fortunately, there are risk-management tools to help you protect yourself and your family from the unexpected.
There are 3 categories of risk management that need to be considered: property, income, and liability.
Let’s unpack these three areas a bit more.
- Your property needs to be protected against fire, storms, and theft.
- Your family’s income needs to be protected against your death or your disability.
- Your property and your income need to be protected against liabilities resulting from potential lawsuits.
Regardless of your wealth or your income level, each of us needs to periodically conduct a risk assessment. In most cases, the help of an expert would be beneficial and is recommended.
Here’s what you should consider doing:
- Gather all your financial information to identify your assets, liabilities, and income.
- Outline all of your current insurance coverage.
- Identify your potential risks.
- Identify gaps in your insurance coverage. Determine if you have excess coverage in some areas. Remember that excess insurance is a waste of your money, but any shortfalls in coverage leave you vulnerable.
None of us like paying insurance premiums. At the end of the day in an ideal world, you hope you’ve paid for something that you did not need to collect on. But you don’t want to be penny wise and pound foolish. Working with a risk-management specialist who will help you identify your risks and help you cover those risks could be worth their weight in gold. Literally.
One final note for the wealthy. For those who have illiquid business holdings or have a net worth greater than $10 million, federal estate taxes can be one of the largest dollar risks to your family wealth. Consequently, bringing in a professional who specializes in this area is also recommended.
For more insight, listen to Jentner Wealth Management’s weekly podcast by clicking here. Or download Jentner’s white papers on The Four Cornerstones of Prudent Investing and The Active Versus Passive Investing Debate.