Financial protection is a necessity for everyone, regardless of net worth. Protection measures provide security, safeguard business continuity, minimize tax liabilities and shield assets for future generations. Whether the protection is for you as an individual or for your business, Benjamin Franklin’s advice is spot on when it comes to preventing the loss of your hard-earned resources: “An ounce of prevention is worth a pound of cure.”

From credit freezes, protection trusts and portfolio diversification to maintaining low debt-to-income ratios, using specialized entity structures and employing comprehensive insurance policies, initiating the following strategies could be the ounce now that’s worth the pound later.

Credit Freezes and Monitoring
Implement a credit freeze with all three major bureaus and use monitoring services to prevent identity theft. A credit freeze can be kept in place indefinitely and only lifted temporarily when you need to apply for credit, a job or insurance. You must contact each of the three major credit bureaus to lift the freeze for a specific, user-defined period. After the requested time of the temporary lift has passed, the freeze automatically reinstates. 

To implement a free credit freeze and protect against identity theft, you must contact each of the three major bureaus individually online, by phone or by mail. The fastest method is creating an account on each bureau's website. Here is information for each bureau:

Equifax
https://www.equifax.com/personal/credit-report-services/credit-freeze/
1-800-685-1111

Experian
https://www.experian.com/help/credit-freeze/
 1-888-397-3742

TransUnion
https://www.transunion.com/credit-freeze?atvy=%7B%22305638%22%3A%22Experience+A%22%7D
1-888-909-8872

Asset Protection Trusts
Utilize domestic or offshore asset protection trusts to shield assets from potential creditors or lawsuits. These trusts shield assets by transferring legal ownership of property from an individual to an irrevocable trust managed by an independent trustee. Because you no longer directly own or control the assets, they become unreachable by personal creditors or legal judgments. 

Legal Entity Structures
Structure ownership of assets through limited liability companies (LLCs), family limited partnerships (FLPs) or corporations to separate personal credit from business liabilities. Legal entity structures like LLCs and corporations establish a business as a distinct legal entity to create a "corporate veil" that shields personal assets from business debts and lawsuits. This separation is maintained by using Employer Identification Numbers (EINs), dedicated business bank accounts and avoiding personal guarantees on debt. 

Strategic Debt Management
Individuals who keep debt levels low, relative to their overall net worth, to keep a high credit score maintain eligibility for favorable lending terms. A high credit score is achieved by keeping credit utilization below 30%, ensuring on-time payments, maintaining a mix of credit types and strategically using debt to build wealth rather than for consumption. This approach allows you to leverage low-interest loans, avoid high-interest debt and keep older accounts open to optimize your credit history. 

Insurance Coverage
Maintain robust liability coverage to protect against significant legal and credit risks. This coverage ensures financial continuity by transferring financial liability for lawsuits, damages, and bad debt from the policyholder to an insurer. It covers legal defense costs, settlements and potential judgments. Credit risk insurance protects against bad debt by ensuring accounts receivable will be reimbursed if customers fail to pay invoices due to insolvency or other reasons.

Estate Planning
Shield yourself and your beneficiaries from future creditors by using trusts and strategic, legal gifting to remove assets from your personal estate. Rules and requirements vary among irrevocable trusts, Domestic Asset Protection trusts (DAPTs) and spendthrift trusts, but they are good options to protect your financial legacy now and as it passes to heirs. Gifting assets, including using annual gift tax exclusions, reduces your personal estate size. This lessens the assets available for potential creditors to target.

Regardless of your earnings, pursuing every available strategy to protect your wealth, credit and assets is worth your peace of mind. Your future self and family will be grateful that you took action to safeguard your assets.