SFO Wealth Preservation and Asset Protection

SFO Wealth Preservation and Asset Protection

SFO Wealth Preservation and Asset Protection

Wealth preservation is one of the most sought after and value added segments of family office services, as retention of net worth is paramount in most family priorities. Wealth preservation is the holistic approach adopted by family advisors to achieve the common goals of asset protection, manageable structure, minimization of risk, and magnification and eventual transition of wealth.

While most families begin their foray into the business world with the goal of amassing as much net worth as possible, many are surprised that upon reaching a level of success that it can often be more difficult to hold on to wealth than it was to earn it. With the increasing complexity of wealth, and the need to coordinate professional activities, the family office has evolved as the central advisory source.

An important subset of wealth preservation is the field of asset protection. Due to its popularity, other planning areas have begun to use the phrase, sometimes distorting its definition. Some use “asset protection” to sell casualty insurance, lower risk investments, prenuptial agreements, wills, and many more tangentially related areas.

At its core, asset protection is the use of legal entities, structures, and strategies to make assets difficult or impossible for a potential creditor to reach. Asset protection planning often has strong estate planning benefits but does not involve a specific product, insurance, or tax ideas. The aim of asset protection is to mitigate the risk to family net worth posed by creditors, predators and divorce and works best when coordinated with a comprehensive wealth preservation strategy.

The purpose of this article is to outline foundational concepts of wealth preservation and asset protection and their practical applications in the family office arena.

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