Investor's column: Here's what you need to know to protect your wealth

You have worked with a financial adviser for many years, paid lots of taxes and now you have a nice nest egg.

What could go wrong?

Plenty.

Here are just a few situations. You may have had personal experiences that might scare most people.

Let’s talk about property loss. Remember Mount Kilauea in Hawaii? It recently erupted and poured hot lava on Leilani Estates, destroying many homes.

Leilani Estates is built on the side of an active volcano. No insurance company would give you property insurance. The risk for them is too great.

The home owners assumed the risk of loss, maybe for the lifestyle and the view. Now some homes are buried under hot lava.

How about a casualty loss? You cause an automobile accident for which you are at fault. Let’s say you have $300,000 of liability insurance.

The judgment against you is $1 million and now you owe $700,000. You probably won’t like to write that check, but you owe that judgment against you.

An umbrella policy covering property and casualty events might be a consideration to cover some of the risk.

My insurance agent suggested that a minimum of a $1 million umbrella policy may be appropriate for property and casualty losses. It might not be enough, but it’s something.

You decide to buy junior a car and put the title into joint ownership. Junior has an accident that he caused. The driver of the car and both owners of the car are liable. You tried to help junior, but your nest egg just cracked, and money is flowing out.

Then junior tries to get a loan, but because of his bad credit, you are required to co-sign the loan. Junior defaults, and now you are stuck paying the monthly payments for something that junior uses.

Long term care can hurt your nest egg. Visit www.longtermcare.gov to get an idea of the cost of basic health care.

On that website, the Genworth Insurance Company estimates the cost by regions within the U.S. People are living longer than ever, but 70 percent of those over 65 will need long term care at some point.

For example, the latest annual estimates for the Tampa Bay area for 2017 can be troubling and expensive. For a home Health Aide based on 44 hours per week, the annual cost is $48,048. For an assisted living facility, the cost is about $36,000.

A semi-private room at a nursing home is $98,185 annually maybe for as long as 3 years. That’s about $295,000. After those expenses, how much of your nest egg is left? Maybe long-term care insurance could help.

Whose watching your investment portfolio? You might glance at it occasionally, but that portfolio may control your life style. Doing without it would not be fun.

As you can see, there are many things that can go wrong and attack your nest egg. Insurance might cover some events, but people try to do good things only to find that it turned out badly.

Remember, “No good deed goes unpunished” said Clare Boothe Luce, an American dramatist.

That’s why I consider wealth management as the process of building and distributing assets. Just as important, I consider wealth protection as the process of protecting those assets.

What have you done to protect your assets? Do you have protection strategies in place?

A thorough review with your financial planner, estate planner, or other trusted persons would be a smart move. Talk things out before a disaster might happen. Sometimes the best answer is insurance or a firm NO.

You worked hard to make your nest egg and once is enough.

Now, let’s not lose it.

Jim Zientara is a financial planner with Raymond James Financial Services, Inc. Member FINRA/SIPC. His website is thefinancialplanningguy.info and he can be reached at 941-750-6818. His office is at 11009 Gatewood Drive, Suite 101, in Lakewood Ranch.