Life moves at breakneck speed in 2025.
What is standard today may be gone by tomorrow.
This includes our financial wellbeing.
What once was reserved for the wealthy elite, asset protection has become standard in American households. More than ever before, the average person is acutely aware that a lifetime of hard work and dedication can be wiped out in the blink of an eye amid the myriad challenges and threats of today’s digital economy. Keep reading as we explore why more and more people are thinking about asset safety.
Uncertain Economic Times
“Times are tough.”
It is a phrase that every generation has undoubtedly uttered at some point.
With that said, those navigating the economic climate of 2025 are completely justified in their utterance Asset safety. A few of the factors putting pressure on contemporary American households include:
- Inflation outstripping wages
- Untenable healthcare costs
- High mortgage interest rates
- Unaffordable childcare
- Climate-related disasters
In many ways, life has never been better. The standard of living has never been higher for most people. But it would be remiss not to acknowledge just how quickly it can all be wiped away without the proper safeguards.
The Rise of Automation
In case you hadn’t heard, your favorite company is finding new ways to leverage powerful AI technology.
For all of the excitement that these ads are supposed to elicit, they have a way of inducing stress instead. The threat of a bot taking your job is not something anyone wants to live with.
How does an experienced computer programmer restart when their role is eliminated? Where does a 20-year CPA turn when software dominates the tax industry?
With this in mind, many white-collar professionals are looking for ways to ensure their ongoing financial wellbeing when their salaries are no longer a guarantee in the age of automation.
Increased Incidence of Scams
As noted, the rise of technology has changed the way in which people live and work.
It has also changed the way in which criminals can scam you out of your assets.
From coaxing you to “invest” in a fraudulent crypto to intercepting your text messages, the avenues for bad actors to tap into your life’s savings are ubiquitous in this day and age.
While staying vigilant and scam-savvy are a great first step, it may not be possible to avoid every digital con out there. As such, it is a great idea to consult an asset protection attorney for advice on how to keep your assets shielded from cybercriminals.
How Wills and Trusts Can Help in Asset Protection
It is sort of generally-known that wills and trusts are important components of asset protection. They were likely at the top of your to-do list this New Year.
All jokes aside, wills and trusts do play an essential role in asset safety.
A will is simply a legal document that certifies your wishes upon death. It can name beneficiaries for your assets, delineate childcare, and put a bow tie on anything left unsettled during your lifetime.
While wills are a great “blueprint” for asset distribution, they do have some limitations. A few of the most pertinent include:
- Only go into effect upon death
- Do not allow for the incremental distribution of assets
- Must pass through probate court, meaning the will is not guaranteed to be executed as intended
As such, people wanting some next-level control over their assets commonly set up trusts in addition to wills.
A trust is a separate legal entity into which assets are deposited. The person who sets up the trust (trustor) appoints a trustee to manage and administer funds as agreed upon in the trust document. Assets in the trust are completely “out of reach” from lawsuits and creditors to whom the trustor is indebted.
Other advantages to a trust over a simple will is that it avoids probate court and does not require death of the trustor for funds to be accessed by the beneficiary.
With that said, there are a couple of considerations to keep in mind with trusts. Many types of trusts are irrevocable, meaning that once the terms are agreed upon and assets transferred, the grantor cannot change them. In addition, while trusts offer great asset protection for beneficiaries, they often have little benefit to the trustor themselves. As such, more people with significant and/or complex assets are exploring the benefits of a domestic asset protection trust (DAPT). A DAPT is a type of irrevocable trust that gives the trustor some control over beneficial interest (in some states).
When carefully constructed by an experienced attorney, a trustor can protect an LLC within a DAPT and receive discretionary distributions from the trust while keeping all assets safe from creditors and judgments.
Take Nothing for Granted and Prioritize Asset Safety Today
Asset protection is not reserved for the rich. It is a fact of life for all people in today’s tenuous economic climate. Consider the various factors listed above and develop a comprehensive asset protection plan today. For more of the latest trends in business, law, and finance, explore the content at 2A Magazine for more thought-provoking reads!
