Page 30 - FOP August 2021

Asset protection for your home
It is often shocking to discover how vulnerable your
home, your most valuable asset, is to being lost. Yet law.
a few simple, inexpensive asset protection steps can safeguard it. There is more extensive de- tail on the Police Benefits Plan website, or you can contact me directly for more infor- mation. Here is a list of what you can do right now.
Tenants by the entirety
•
Water backup coverage is essential if you live in Chicago and have a basement or live in a flood zone.
• Flood coverage: Standard home insurance policies do not cover damage from from flooding due to a hurricane or river overflow act. However, you can obtain this cover- age from the federal government’s National Flood Insur-
meet new and often stricter building codes or changes in the
FOP
Benefits Plan
ance Program, www.floodsmart.gov, and your insurance agent or company can assist you.
Your personal possessions coverage amount should protect the replacement of all the contents of your home if they are stolen or destroyed in a disaster. Therefore, you should do a periodic inventory of the actual value of all your possessions. After that, compare your inventory to the coverage amount on your policy. A replacement cost policy is far better than an actual cost policy. That is to say, it pays the current cost to re- place a possession instead of just reimbursing you for what you spent 10 years ago or more.
Asset protection coverage: Most homeowners policies have $100,000 in liability protection against damages that you, a family member or a pet cause to another person. Conse- quently, it is not enough insurance coverage. Importantly, it would be best if you considered carrying umbrella insurance coverage.
TOM TUOHY
High-risk, uninsured professions require you
to hold title to your marital residence in tenants by the entirety (TBE). This form of legal title protects your marital property from lawsuits and creditors of one spouse. It is exclusively available to married couples. Claims made against both spouses are not cov- ered, and it is only effective for your principal place of residence. For more information on your current title and TBE deeds, you may contact me directly.
Homeowners insurance
Make sure your homeowners insurance policy adequately pro- tects you from unexpected events, and avoid being underinsured:
• You need high enough replacement cost and extended re-
placement cost insurance limits to rebuild your house entire- ly if it is destroyed. Extended replacement cost coverage adds up to 20 percent over replacement cost coverage if a disaster increases building material and labor costs. We are seeing that now with the enormous increase in the price of lumber because of 2020 events.
• Inflation guard coverage adjusts rebuilding costs that have in- creased since you purchased your home.
• Ordinance or law coverage pays for the cost of rebuilding to
•
•
Umbrella insurance
An umbrella insurance policy provides a minimum of $1 million in liability protection for your home and each auto covered under the same policy. It costs an average of only $225 per year. If you consider the cost of hospitalization for injuries sustained in a mi- nor vehicle accident or a fall or accident in your home, $100,000 isn’t going to cover it. In other words, you will be held liable for the excess amount. Most umbrella policies have $1 million, $2 million and $3 million limits. It would be best if you always carry enough liability insurance to cover the value of all your assets. Check with your agent for rates and coverage.
Probate/living trusts
At the end of your life, or if you become incapacitated, if your home title, investments or bank accounts are in your name, they are at risk of probate. It is essential to remember that a will does not avoid probate, a system that takes an average of 18 months or more to complete.
A revocable living trust is a legal document that can avoid pro- bate. A trust allows you to privately pass your assets to your family, friends or charities after your death. Assets include your real es- tate, bank accounts, stocks and minor beneficiary policies and ac- counts. Compared to the cost and length of probate, a living trust is one of the least expensive and best investments you can make for your family.
Call my office today to lock in your FOP 33 percent reduced rate for a complete living trust estate plan.
Police Benefits Plan
For an expanded presentation of asset protection strategies and to receive regular updates on strategies to protect what you have earned, visit and register with the Police Benefits Plan at www.fop- benefitsplan.com or call 312-559-8444 for assistance with register- ing. Registration for FOP members, retirees and families is free.
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Benefits Plan. He has been a police lawyer for over three decades. His father was a CPD detective, and his grandfather was CPD Chief of Major Investigations. You can reach Tom at 312-559-8400 or in his Oak- brook Terrace offices.
30 CHICAGO LODGE 7 ■ AUGUST 2021