Follow this wise advice from a successful entrepreneur to find out how to hold on to the money you make.
Making money is only half the battle — keeping it is the other half. Yet if you read financial publications, far more than 50 percent of the articles are about ways to make money. Saving money doesn’t make for great headlines, but it’s vital to your long-term success. With that in mind, I want to discuss a few important ways that can help preserve your wealth.
(Full disclosure: I’m not an attorney, and this isn’t meant as professional legal advice. Such advice should come from a practicing attorney. I’m sharing tips that have worked for me and what I’ve learned over the years. Your mileage may vary.)
Create an estate plan and establish a trust
Find a reputable attorney who specializes in estate planning. There are many reasons to establish a family trust, some of which are asset protection, a plan and guide to continue your legacy after your death, to provide for your family, tax benefits, supporting your favorite cause, avoiding probate court (which is a lengthy process for your family to go through to get your assets), and many more. This is a must.
Set up an SPE (Single Purpose Entity) for each investment
Are you protected against liability? In our litigious society, it’s quite easy for somebody to maliciously file a lawsuit against you. How you hold ownership in each of your assets is crucial; you don’t want them all to be under your trust. I set up my businesses and properties as separate entities from my trust. I also have all the properties and businesses I own in their own separate SPE (single purpose entity). This means that the members of that LLC are in my trust, so it gives me another layer of protection. You should work with your estate planner and CPA to determine what suits you the best.