Andrew Carnegie offered some advice for those who wanted to follow in his footsteps: “Put all your eggs in one basket and then keep an eye on that basket.”
Keeping an eye on those eggs, often known as asset protection, may no longer be as simple as it once was. It’s no less of a problem for those who have amassed a significant amount of riches and are riskier without personal insurance for a wealthy person.
Deposit and Securities Insurance
Simple measures such as deposit insurance on bank accounts and the equivalent for brokerage accounts are examples of asset protection at its most basic level.
The FDIC, for example, insures funds in member banks up to $250,000 per depositor, per bank, and per “ownership type.” For example, you may have $250,000 in a personal account, a joint account, an IRA, and a trust account, all at the same bank, and be insured for the whole $1 million. There are various other types of ownership besides those four, and there are plenty of banks.
A pricey lawsuit is maybe a greater risk to your own wealth than the likelihood of a bank or brokerage failure. This is when other types of insurance come into play, such as:
- Liability Insurance
- Umbrella Coverage
- Professional Liability
- Business Liability
- Directors and Officers Insurance
Having personal insurance for a wealthy person is an important step in protecting your assets and legacy.