Managing risks is part of curating wealth. Whenever you engage in a major life transition, whether you’re tying the knot, starting a new business partnership or engaging in a risky but hopeful philanthropic venture, you want to bound your risk and exposure as much as possible. The question you face is: how?
Legal instruments, such as well-tailored buy-sell agreements and prenuptial agreements, can help you hedge against future disasters. But these kinds of arrangements might not protect you enough from low-probability-high-pain risks.
Exactly how much risk can you take on or should you take on? According to author and researcher, Jim Collins, successful business owners and entrepreneurs often use a concept known as “Productive Paranoia” to limit possible damage. In other words, based on the actual data, it is beneficial to your success to be conservative and cautious when it comes to risk. The top 10 percent of wealth earners practice Productive Paranoia, and so should you.
That insight may fly in the face of advice you’ve heard about wealth management. Popular media celebrates those who take big risks and succeed big time. And yes, some risk-hungry mavericks do get lucky and strike it big, and there are certainly times when calibrated risk-taking makes worlds of sense. However, in general, being conservative about your assets and investments – almost to the point of paranoia – seems to lead to prosperity, consistently.
So what kinds of risk might threaten what you’ve built or what you’re trying to accomplish? Getting married or divorced can obviously expose you (and, conversely, potentially aid you) financially. Starting a new business venture with a partner can likewise create new opportunities for growth – and danger – especially if you’re entering a virgin market or if you’ve never worked with that partner previously.
Obviously, there’s no one-size-fits-all solution to risk management. However, one surprisingly common strategy – one that many wealth Ohio business owners and wealthy individuals are using – involves an instrument known as an Ohio Legacy Trust. This unique type of trust is a domestic asset protection vehicle; it can protect your business and assets from an array of creditors and other “predators,” such as greedy business partners, careless children and the IRS. You can greatly reduce your risk and exposure while maintaining the ability to tap critical assets.
Contact Gudorf Law Group today to explore the process of setting up your Ohio Legacy Trust and/or engaging in other exceptional planning strategies to protect your wealth and ensure your peace of mind. Call us now at 1-877-483-6730 for a free consultation.