Risk Management

The first step is to recognize the risks that may impact your life. The second is to estimate their potential size and impact. You then have two choices: accept the risk and hope things don’t go wrong, as many do. Or look for ways to transfer or reduce that risk, through legal or financial tools.

 

We are not attorneys, nor your CPA, which you will ultimately need to consult. But here are commonly discussed considerations:

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• Rental property: Tenant injuries can lead to lawsuits. Some investors use legal entities for ownership and add umbrella liability insurance to help reduce this exposure.

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• Teen drivers: Young drivers can present higher risks. Families sometimes place the vehicle and insurance in the teen’s name, and may set aside funds for safe transportation alternatives.

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• Recreational vehicles (‘Toys’): Boats, jet skis, planes, and similar assets

can involve significant liability. Owners often separate them into entities and carry adequate insurance.

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• Insurance coverage: Core areas include health, disability (especially for business owners), life insurance, long-term care as you age, and

homeowner’s insurance. Umbrella liability can provide added protection.

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• Concentrated or illiquid assets: Large positions in company stock,

private businesses, or assets that are hard to sell can create challenges.

Strategies exist to help diversify, plan for succession, and manage income

needs.

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• Estate taxes: For some families, estate taxes can leave heirs with a large bill. Planning strategies such as life insurance, gifting, or trusts may provide liquidity, but these should be evaluated with your own tax and legal professionals.

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Power of Attorney

We do not want to be your CPA. But my Senior Partner co-founded a thriving CPA firm that still employs over 50 professionals working nationwide. Mike Milam makes himself available to all new clients, additional charge. Taking a fundamental review of how all the moving without parts in your life interact, we strive to come-up with new suggested tax strategies to take to your own CPA, for them to judge if they are right for you.