How much money do I need before an asset protection plan makes sense?
Colin Ley: Hey, Colin Ley here with LayRoots. [Shreya [00:00:07] has been sent home for today, so I am all alone here. So I thought I’d hop on and make a quick video about one of the most common questions I get about asset protection. I had lunch with another attorney today. He asked the question, a client asked the question this morning, and it’s one of the most common things I get, and that is how much money do I need before having an asset protection plan makes sense? And it’s a really hard question to answer because everybody’s different. Everybody values their assets differently. Rules are different depending on where you live. And there’s a great attorney, Barry Engel, who told people that $500,000 usually means as much to that person as $5 million means to another person, course he’s said it a lot better in his book. But basically, all people value their money and their assets.
To me, there’s no set number. I’ve seen people with a net worth of 250,000 setting up an asset protection trust. It’s probably about the lowest, but really it comes down to how much value you get out of having the asset protection plan in place. Like does it help you sleep better at night? If it’s worth the money that you spend on maintaining the plan, so for example, when I started a business with Shreya and father-in-law, for me, I was worried about what would happen if something happened in the business. If we got in a lawsuit, an employee something or other happened. And for me, I wanted to get the best plan that was out there, but I couldn’t afford it. You know, it would be five, $10,000 a year just to maintain that plan, so I did nothing, which was dumb.
I eventually started building my plan up myself and started with something smaller that was just a few hundred dollars a year to maintain. And to me, it didn’t matter. Probably still had a negative net worth at the time, but those few hundred dollars a year certainly made me feel better. And now our plan has gotten stronger and we definitely spend a couple thousand dollars a year in maintaining our asset protection plan.
And to me, I get a lot of value out of that. So it doesn’t come down to a number, about how many assets we have, how much we have in the bank. To me, it’s does spending that money make me feel better and make me worry less? And like I say, live a more carefree life. So what do you think? Is there a number for you? At what point would you feel that you are ready to invest in an asset protection strategy?
Leave that in the comments below or if you’ve got any other questions, let me know. If you enjoyed the video hit like. I would appreciate it very much and have a great one. See ya.
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