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What is Wealth Preservation and why is it important?

Wealth Preservation - Katz & Associates

Wealth Preservation simply put is the protection of your assets and accumulated wealth. Most Estate Planning lawyers discuss drafting a will, a trust or a combination of instruments without completing a wealth preservation review. Next, these attorneys complete a standard package fitting standard one size fits all estate planning goals. Is this enough to protect you and your family? Simply put, the short answer is no.

These attorneys fail to discuss or review your wealth preservation needs [maintenance of your assets and income] and asset protection. To truly complete a proper Estate Plan you and your attorney must focus on your entire short term and long term financial picture. Drafting a will or creating a trust and placing your assets into it is not enough. So what exactly is Wealth Preservation?

What is Wealth Preservation?

Wealth Preservation is the method of protecting and maintaining your assets and income. Wealth Preservation is not just asset protection, but includes protecting the principal of your assets and income. You worked hard for the assets and income, so why risk it? We urge you to protect it!

Wills and trusts serves no purpose if your assets and income are depleted. Several issues to consider when discussing wealth preservation include inflation, life insurance, retirement planning, long-term care, proper asset allocation and protection against capital market risk. Proper wealth preservation requires estate planning strategies to mitigate the effects of taxes, exit and succession strategies from businesses, and tax advantaged investments intended to maximize income while minimizing tax burdens.

How can you protect your assets and income: Wealth Preservation!

First: Evaluate your current risks:

It is very difficult to preserve your wealth, especially if 100% of your wealth is placed in the stock or real estate. Diversification is extremely important and as a result of a market that can and has flipped upside down overnight, a wealth preservation review is important for you. The stock market especially can be very volatile and there are always changing trends.

When disaster strikes and all your money is tied to the stock or real estate market

What happens when the stock market tanks? As a result, you lose your wealth. If all your money is tied to the stock market, your wealth fluctuates based on market performance. You might be enjoying the benefits at this time if your money is in the stock market. However, any true fiduciary should advise the market will eventually correct itself. The current stock valuations are inflated above the actual values of the companies the stocks represent.

The stock market will eventually fall as history dictates. As the old saying goes, what goes up must go down. Every time the market dips your wealth is depleted. This could take place at a time when you need to liquidate your portfolio. How many people do you know that have lost everything they had in the stock market? This is why you need a wealth preservation analysis.

When you wish to liquidate real estate to pay for retirement or other expenses

Much like the stock market, if 100% of your money is tied to real estate investments you are risking 100% of your wealth. Many people lost everything in the real estate market crash in 2008. Real estate is a fluctuating market. Why risk 100% of your wealth? Doing such is no different than walking into a casino putting all your money in a game of chance. Stocks and Real Estate are generally a game of chance so why risk it all? Most noteworthy, we are advising you not to put all your eggs in one basket. All qualified financial experts tell you to diversify investments to reduce your risk. In other words, it's probably not wise to place all your wealth in only stocks or just the real estate. Get a wealth preservation evaluation to help reduce your risks.

Properly Evaluate your Portfolio

We urge you to re-evaluate the risks associated with every investment made. With enticing advertising used by stock brokers, financial institutions and realtors, investors are sometimes deceived into believing that certain investments are "risk-free". Common sense will tell you no investment is completely risk-free. However, with regular re-evaluations, you can protect your wealth and ultimately your family. Hence, your goal should be wealth preservation so when disaster strikes or when you retire, your wealth will not be depleted.

Second: Preserve Wealth by Diversifying your investments

As time goes on, your goals, wants and needs generally change. As one who understands economics and finance, a true fiduciary will tell you to diversify your investments. Diversifying your investments generally lowers your risk of wealth depletion. As discussed above, imagine all your money tied to the stock market or the real estate market in the year 2009 and it was time to retire. Your life would have been in chaos.

A downturn in the real estate market or stock market can happen at any time. Your portfolio and financial standing might change drastically depending on when you retire or when you need money due to catastrophic events. Consequently, diversifying your portfolio and finding safer investment options as part of your portfolio to protect against unforeseen events is a must.

Third: Understand that many wealth preservation investments exist other than Stocks and Real Estate

What if I told you there are investment vehicles where no matter what happens with the stock market or the real estate market, your wealth will not deplete. There exists investment vehicles tied to the stock market that when the stock market increases the value of your portfolio increases and when the stock market decreases the principal will never go below your initial investment. You may be asking yourself why hasn't my financial advisor or stock broker attempted to sell me any of these vehicles.

This can easily be answered by using an example. When you want to buy a BMW, do you go to a Honda dealership? Some of your financial advisors and stock brokers do not sell these other investment vehicles. Financial advisors and stock brokers make their living by earning commissions from the products they sell their customers. So if they do not sell a specific product they will not suggest investing in such. Much like the Honda Dealership, they won't attempt to sell you a BMW.

Set up a no obligation - free consultation with us to discuss a Wealth Preservation Estate Plan

You work hard to create your wealth. Using our Wealth Preservation Services will help you protect your wealth. Our law firm has employed a team to fully evaluate your financial picture so we can truly create the best estate plan and asset protection for you. Such comes with no obligation and the evaluation is free. We highly recommend a wealth preservation review so we can better serve you and your estate planning needs.

By our team reviewing your portfolio we can better help you obtain true wealth preservation. After completion of a full review of your financial picture and estate plan goals you will ultimately have the tools to make well-informed decisions regarding your estate plan.

We are not advising you to fire your current financial adviser or stock brokers. Our team of experienced lawyers in Stuart, Florida can work with your current stock brokerage and/or advisors to better serve you. However, we are advising you to allow our team to fully evaluate your financial picture so we can better help you preserve your wealth that you worked so hard to build.

Please contact us now at 772.933.5289 or 561.705.7246 or fill out the contact form below to set up a free meeting to evaluate your estate and financial needs and help put together an estate plan that fully encompasses wealth preservation.

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Common Legal Questions

What is a Will?

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What is Wealth Preservation?