Asset protection isn’t just for the wealthy, anyone (including the working and middle-class) can take steps to protect personal and business assets. And you don’t need to engage in a lot of legal fireworks, there are some basic things you can do to protect your assets today.

Everyone Needs Protection

Before we delve too deeply into the how’s of asset protection, let’s look at a few of the most important why’s.

Medical Debt. 
One illness can set you back tens of thousands of dollars. And if you fail to pay, medical providers will send you claims to collections where bill collectors will aggressively pursue you. They will file lawsuits, file liens against your real property, and even garnish your wages.

Divorce. 
When people get married, they rarely think that their loving relationship will end in deep hostilities. But the reality is that at least 50 percent of all married couples will divorce and many of those splits are less than amicable. Using the right kinds of asset protection strategies you can shield your assets from a hostile ex-spouse.

Accidents. 
No matter how conscientious you are, eventually there will be some kind of mishap in your life—a vehicle collision, a slip and fall at the business you own, or some other unfortunate event where someone gets hurt because of you. Asset protection will help shield you assets from lawsuits while still fairly compensating anyone who is injured.

Job Loss. 
Losing your income can have devastating effects on your lifestyle. When you lose your income you may not bring in enough money to pay your mortgage or other bills. A little asset protection planning will help you weather the storm of a job loss.

There are many other reasons for asset protection planning but you get the idea. Not only do middle-class and working-class people need good asset protection planning, they can’t afford to go without it.

Insurance

One of the easiest and most affordable ways to protect your assets is insurance. Let’s take a look at some types of insurance you need to protect yourself.

Auto Insurance. 
If you’re using your car for work, for your business, or even just to get your kids to and from school and activities, you need good auto insurance. Don’t just rely on the minimum requirement—liability insurance—make sure that you get a comprehensive plan so that you are covered to repair damages to your vehicle (or your health) even if a collision is your fault or due to some random event such as tree falling on your car.

Health Insurance. 
One accident, injury, or illness could wipe out your savings if you don’t have health insurance. Make sure you have good coverage for everyone in your family. You should also setup a Health Savings Account (HSA) so that you can save for out-of-pocket expenses—that savings is “pre-tax.” As you search for health insurance get something with a manageable deductible and avoid policies that limit the dollar amount you can receive in healthcare.

Homeowners/Renters Insurance. 
Make sure that your home and your belongings are covered in case of a natural disaster, fire, or burglary. Check your policy carefully to find out what is and isn’t covered and avoid any policy that doesn’t cover events that are likely to happen in your region. You need to pay special attention to flood and earthquake coverage. Many policies won’t automatically cover these events so you may need to pay extra for this type of coverage if you need it.

Life Insurance. 
Are you the primary breadwinner in your household? If so, in case of your death you need life insurance that will replace the income you provided your family while alive.  Typically, it is suggested that you get life insurance that is three times your annual salary. But you may want to get more if you want to make sure that certain things are covered in the case of your death such as paying for your child’s college or paying off outstanding debts (i.e. a mortgage or car payment) so that they don’t fall on your spouse. There are different types of life insurance available so do your research to decide which is the right fit for your circumstances and needs.

Disability Insurance. 
An accident or illness could keep you out of work for weeks, months or even years. And a permanent disability can prevent you from working at your full capacity indefinitely. Even if you have savings and investments, a disability can force you to use those assets to survive. This is why disability insurance (especially long-term disability) is something no one should skip. Do your research and choose long-term disability insurance coverage that will help you pay at least your essentials while you’re unable to work.

Long-term care insurance.
If you’re nearing the age of 60 or if you’re already there, you need to invest in long-term care insurance. Any chronic illness that requires long-term care is expensive and would quickly exhaust your assets if you paid for it out-of-pocket. If your employer offers long-term care insurance at little cost, you should invest in it no matter your age.

Estate Planning

As part of your asset protection strategy, you should put together an estate plan—what will happen to your assets when you’re deceased? This plan should include instructions on what will happen if you’re incapacitated. There are six things you should include in your estate planning:

A will. 
You should know what you’re leaving behind when you die and to whom.

Guardianship. 
If you have minor children, you should be clear about who will take care of them if you die.

Power of attorney and executor. 
Who will manage your estate after you die? Who will manage your affairs if you’re incapacitated? You should know this information.

Protecting your assets with these very inexpensive and simple strategies is a first step no matter your wealth profile.