But risk is much broader than just losing money, and the more money you have, the more likely it is that these risks are a part of your life.
Let’s
start with your home. Is your home a magnet for the kid’s friends? Do you have
a pool, motorcycles, bicycles, trampolines, dogs. … You get it. The toys that
people with money have are known as an attractive nuisance. They are certainly
attractive, but their inherent danger makes them a nuisance, and a potential
liability.
Dogs,
of course, have nothing to do with money unless your dog goes and bites
someone. And if you are not properly covered for this peril, it can cost you a
pretty penny to defend yourself against even a frivolous lawsuit. Make sure
your umbrella liability insurance is adequate and that it will provide you
protection for all of the risks that you can identify in your life.
What
about a second home? Many with wealth own a second home in the mountains, near
the water or in the desert. They all pose additional risks that you may not be
prepared for. If the home is ever rented, even casually to friends and family,
be sure that your insurance agent is aware of the rentals. If you add a boat,
Jet Ski or other water or recreational toys, the risk multiplies as you may be
responsible for any problems that arise from use of the toys.
Another
reality of real estate is it needs to be maintained, and that means there will
be painters, landscapers and all sorts of contractors floating around the
property from time to time. Some of these contractors are well insured, and
some are not. If you lean towards looking for the best pricing on your home
repairs or maintenance, make sure that you are working with someone who can
show you their certificate of insurance. I’d also check to see that all
subcontractors that they involve have proper coverage including workman’s
compensation for their helpers.
And
the last issue that can raise your risk profile seems really unfair because it
may arise from your benevolent involvement with charitable or community
organizations. Unfortunately, even when you are donating valuable time toward a
not-for-profit organization, you are exposed to liability.
John P. Napolitano is CEO of U.S. Wealth Managementin
Braintree, Mass., and 2012 president of the Financial Planning Association of
Massachusetts. He may be reached at jnap@uswealthcompanies.com
or on Facebook as JohnPNapolitano and US Wealth
Securities offered through LPL Financial, Member FINRA/SIPC.
Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.
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Securities offered through LPL Financial, Member FINRA/SIPC.
Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.
The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.
