Recent events in the banking industry have placed a spotlight on the importance of asset protection. There are a number of steps that you should consider to ensure your assets are well protected today and in the future.

Avenues for asset protection include:

Insurance

Umbrella insurance provides a secondary layer of liability protection beyond standard homeowners and vehicle insurance policies. Should you or your property be held liable in an accident, appropriate umbrella insurance would protect your invested assets. Depending on your assets and life stage, disability and/or life insurance could also be beneficial.

Credit Freezing

By freezing your credit, you will prevent someone from opening a new account in your name. To enact a credit freeze, you must establish accounts at each of the three credit bureaus (Experian, Equifax®, and TransUnion®). Be prepared to safely save and secure the PINs for each account; should you apply for a credit card or loan after you’ve instituted the freeze, the PINs will allow you to unfreeze your credit temporarily.

FDIC Insurance Limits

An individual depositor is insured for up to $250,000 held in checking and/or saving account(s) he/she holds at an insured bank. A couple’s joint checking account, therefore, would be insured for $500,000—but not beyond. For an individual with multiple accounts at a single institution, the combined balance of checking and savings accounts is insured up to $250,000, and a retirement account is insured for an additional $250,000. (Click here for more specifics and a helpful chart from the FDIC.) Bottom line: if you hold more than $250,000 at a single bank, we recommend you review the account types and ownership to ensure your cash is adequately protected.

Estate Planning

An up-to-date estate plan ensures assets flow as you intend upon your death. Gaps in an estate plan can cause unanticipated tax consequences, delays in the distribution of assets, and higher estate settlement costs.

This article was published as part of the LBA Spring 2023 Reflections & Observations.