Reviewed by MARGARET JAMES Fact checked by SUZANNE KVILHAUG Steel magnate Andrew Carnegie had some advice for anyone who wanted to follow in his footsteps: ” He advised, “Put all of your eggs in one basket, and then watch that basket.”
Asset protection, or watching those eggs, may no longer be as straightforward as it once was. However, it is just as troubling to those who have amassed some wealth. One thing is to make money; Keeping it may necessitate a completely different set of methods.
Deposit and Securities Insurance At its most fundamental level, asset protection can consist of straightforward measures like deposit insurance for bank accounts and brokerage accounts.
For instance, money in member banks is covered by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per bank, and per “ownership category.” So, for instance, if you have $250,000 in each of your individual, joint, IRA, and trust accounts at the same bank, you could be covered for the entire $1 million. In addition to those four, there are several other types of ownership and numerous banks.
Your securities and cash in member brokerage houses are protected by the Securities Investor Protection Corporation (SIPC) from loss or, in some cases, theft from your account.
The SIPC refers to this as “separate capacity,” but you can structure your accounts in a variety of ways to increase your total coverage, just like you can with the FDIC and banks.
