How to Protect Your Assets Now to Cover Your Ass(ets) for Later

You’re at Risk if You’re Not Keeping Good Records of  Your Personal Assets

Your valuables are your assets. It’s important to consider them as investments and be knowledgeable about how to protect your assets from disaster and regular wear and tear.

Protect What You Love (Or, at Least What You Paid for)

Tangible assets are concrete things you can see and touch. They can range anywhere from land and vehicles to cash and collectibles. Some of these assets will be more liquid (i.e., easily convertible to cash) than others, which is an important thing to consider when recording your assets. What can be easily sold in a year, and what could take longer to convert to cash?

(By the way, there are also methods for recording your assets that are intangible, too. These items have value that can’t necessarily be seen, such as secret recipes or business plans. Think of these items as intellectual property that can contribute towards your wealth, which, if stolen, could give others some sort of advantage).

If your tangible assets can be stored, like jewelry or art, you’ll have to house them in a manner that keeps them in tip-top shape while they accrue equity.

How to Protect Your Assets: Insurance and Maintenance

Here are some steps to keep in mind when recording your assets, and how to protect personal assets once they’ve been valued:

1. If It has Value to You Now, Insure It Now

This may seem like a given for assets such as your home or other real estate investments, but remember to also insure things like precious metals and jewelry, too. Your homeowner’s policy will only cover up to a certain amount, so if you have more expensive pieces, you’ll have to add an endorsement to your policy specifically for those items.

[Editors’ Note: Learn more about how to use insurance to protect your assets by reading this collection of articles or by viewing these webinars.]

2. Leave a Paper Trail: Record Your Assets with Documentation

The documentation process might include taking photos or videos of your items to record the condition they were in at a certain point in time. Then, the question comes in of how exactly to store these documents. You can choose to store them either at a bank in a safe deposit box or at home.

The FDIC recommends carefully planning what to put in your safe deposit box, being mindful not to include anything you might need at a moment’s notice, or if the bank is closed. Home safes are a good option for things like passports and birth certificates. However, the FDIC also states that “no safe deposit box or home safe is completely protected from theft, fire, flood or other loss or damage,” and items should be protected from the elements in fireproof and waterproof containers.

3. Provide Evidence of Ownership and Get an Appraisal

In the case of your unlikely and untimely death, you’ll want to list out your assets, “with a detailed description of each item and its fair market value.” This includes listing intangible assets as well as your valuables and collections that are special to you, such as comic books, heirlooms, and so on.

This process will require that you have your collections formally appraised. This is good practice in general, as having items appraised regularly keeps counterfeiting at bay.

4. Store Your Assets with Care

It’s common sense that once you put your money toward any tangible asset, you’re going to take good care of those items. You’ll monitor or cultivate the land you own; keep up with repairs on the homes, buildings, or other structures you’ve invested in; or protect your antiques in climate-controlled environments. But for things like art, gold, and other precious metals, gems, coins, and jewelry, the method for which to store them is a bit less clear.

As for gold, storing it in a safe at home is your best option, particularly if your home insurance covers a loss. The alternative—using a bank safe deposit box—can actually have some overlooked consequences. “The bank doesn’t insure precious metals that are stored in a safe deposit box. That’s up to you,” says the U.S. Money Reserve. “Purchasing insurance on your own can be costly, and that could minimize the financial strength of these assets. Plus, it can be hard to find an insurer willing to cover precious metals that are being kept at a bank. Oh, and don’t forget the expense of renting the safe deposit box.”

When it comes to fine wine, the process can be trickier than simply finding a location. It’s all about temperature, too. Storing wine between 45 and 65 degrees is best, but don’t forget the importance of humidity. According to Cellaraiders, “Without [humidity], your corks could dry out, and air will get into the bottle, ruining your wine. On the other hand, you don’t want to store your wine in an extremely damp location, as it can promote mold.” Ideally, your wine should be stored at 70% humidity, but if that’s not possible, consider a professional and insured wine storage facility.

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can listen to at your leisure and each includes a comprehensive customer PowerPoint about the topic):

• All About Asset Allocation 
• Estate Planning & Asset Protection in an Hour
• The Legal & Tax Aspect of Investing: Asset Protection; Estate Planning, and Tax Efficiency

This is an updated version of an article originally published on May 25, 2020]

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