Underinsured. Specialty items should be covered with collectibles insurance. Own valuable coin and stamp collections, fine china, and art insurance? Standard homeowners’ policies typically offer inadequate coverage and a standard policy set severely low limits on select “jewelry, silverware, furs, and firearms,” according to Travelers Insurance. Classic car insurance? Cars manufactured prior to 1979 that are not primary vehicles may be eligible for added coverage.
Inadequate documentation. Proper collection and storage of receipts from purchases, transfers, maintenance, and appraisals of tangible assets help create a clear history of value. This will help calculate appropriate insurance. Are these assets held in a trust, under a limited liability corporation, or within another strategic asset protection tool? Proof of these transfers helps protect from creditor and collection claims.
Poor tax planning. Having appropriate valuation documents also establishes whether a tangible asset depreciated or appreciated in value. The Internal Revenue Service proposed new regulations in September 2013 that may affect how tangible property is taxed in dispositions.
Barclays reported last year that high net worth individuals retain about 9% of their wealth in tangible assets. Every individual’s asset protection needs are unique. Whether an individual works in a field where the possibility of a malpractice claim may develop and target their personal assets, like a dentist or physician, or a couple needs a prenuptial agreement to ensure assets are preserved in the event of divorce, every asset should be considered and planned for appropriately with the assistance of an asset protection attorney.