Many people use asset protection trusts and limited liability corporations (LLCs) to protect their wealth. Although these methods have become commonplace in wealth management and estate planning, they can complicate your insurance. Often, financial planners neglect to take insurance into account when moving their clients’ properties into trusts and LLCs, and the results can be disastrous.
Let’s say your financial planner recommends that you move your primary and secondary homes into a family trust. The properties are fully paid for, so the move seems simple enough. You’re not selling the homes and nothing about them is changing, so you don’t think to talk to your insurance agent. Then, after the paperwork has been signed, you find out there’s been significant damage to your secondary home and you have to make a claim. You contact your insurance company, but now they see that the property is no longer deeded to you, the named insured, but instead to your family trust. Even though the situation is functionally the same for you, the insurance company only agreed to insure you, not your trust, and now they are in a position where they can deny the claim.
At Forest Agency, we’re here to help. If you contact us before moving your assets into a trust or LLC, we can add that trust or LLC onto your policy as an additional insured. With our portfolio of companies, we can make sure you have the proper coverage for your new ownership situation. You just have to remember to talk to us first.
Call (708) 383-9000 to have a conversation with your account manager today.