If you’ve made wise financial decisions and have comfortably built wealth for yourself and your family, you might be thinking of ways to secure that wealth, especially when you are no longer going to be around. Studies show that many families lose about 70% of their wealth by the second generation. To ensure that your family does not end up in such a situation, here are some legal ways to protect your wealth and secure your financial future.
- Clear all your debts
The last thing you would want to do is leave your relatives and other descendants behind with large amounts of unpaid debts. Not only does it disrupt their lives, but it piles on to their other debts, and they would lose all those sentimental assets. If you’re focused on leaving a lasting legacy, ensure that you pay off all your debts during your lifetime. It’s not impossible, and you can start by handling those high-interest debts, which typically include credit card debts or personal loans. The next thing you have to do is bring all other debts together to minimize how much interest you pay as much as possible. Next, you can also pay off a higher amount separate from your interest so that your principal amount reduces. This strategy can help you repay all your debts at a much quicker pace.
- Invest in stocks
Investing in stocks and other financial instruments is one of the best ways to secure your wealth and pass it down to future generations. You might not receive instant returns, so it’s best you think of it as a long-term investment that wouldn’t benefit you but those you’ll be leaving behind. You should diversify your investment portfolio and include other options like commodities, properties, or bonds. These investments typically appreciate over a long period and can become more valuable than when you bought them. A solid investment portfolio is one of the best things you can give to your children and future generations, and you will secure your wealth for many years to come.
- Consider estate planning
Contrary to what you might believe, estate planning is not only for the 1%. Everyone should have an estate plan in place regardless of their wealth. Having this plan will protect your beneficiaries. After all, not knowing who would inherit your assets in the event of your passing is a quick way to lose your wealth. It also protects your loved ones from having to pay large taxes. One of the things to ensure is that whoever is in charge of your estate obtains a tax ID number for your estate. They can easily and quickly file an IRS estate tax ID application. Another great benefit of having an estate plan is that it prevents future family disputes, which often lead to expensive court cases.
Hopefully, these suggestions have shown you how to protect your wealth for the future. For additional assistance, it would be best to speak with a qualified attorney to know which option works best for you.