Protecting Your Fortune

What tools are available to protect my millions?

One of the ways you can insure your wealth is to establish a trust. Now, people think in terms of trust for the mega wealthy, but at the end of the day if you have got some degree of money, you might want to consider it. There are all types of trusts. We are talking for the most part about late in life. You might use a trust. The idea is that you create a separate pile of money that is ultimately not yours. It is owned by this legal entity. And it is a way of avoiding, legally, estate taxes and it is a way of preventing your heirs, and the trust fund babies from spending all the money that you give them at once. There are also trusts that are designed to help you with health care benefits because you can qualify for Medicaid coverage if your money is in a special trust. So there is all sorts of ways to protect your money from estate taxes, spend-thrift heirs, and other people who want to take it.

How many lawyers should I have to protect my millions?

One really good one is probably all you'll need. Depending on what business you're in you may need attorneys that specialize in different things. It could be a tax attorney, you could have a corporate attorney, a real estate attorney. There are all different kinds of lawyers and specialties but consider them all and be fortunate that you've got enough money that you can pay them.

How much will it cost to protect my millions?

The surest way to protect your millions and get wealthy long-term is to not pay a lot of money to investment advisors and that. And so particularly when you are starting out, you want to be in no-load mutual funds. These are mutual funds that don't charge you a fee upfront for taking your money, sometimes as high as 5, 6%. You want to be in funds that do not have a lot of expenses to manage the money on an ongoing basis. For example, index funds are designed to just mimic a particular basket of stocks or bonds, and the S&P 500 is an index for example, that people put their money into mutual funds based on. And you find that not only are there funds that you can invest in with no load upfront, but you can also find ones that have really really low expense ratios. This is the money you spend on an annual basis to pay someone to manage the money. It can be as low in some cases as .3 percent, as high as 2 percent. And so you want to make sure that you are paying as little as you have to, to get really good investments.

What are good tax strategies to protect my millions?

There are different types of tax strategies that businesses employ. For example, a lot of people made a lot of money in real estate and there are ways you can exchange property for other property and not pay taxes on the gain. So those are things you want to look at. But also keep in mind that there are people out there that are creating investment vehicles, that are catered to avoiding taxes that may end up costing more in the long run, due to fees. And so, there are different strategies you can employ. The biggest thing, I think, that rich people do that most people don't think about is they don't sell. They own assets for a long time and they get rich slowly.