Wealth Preservation Strategies: A Basic Guide for Americans
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Contents
- What Is Wealth Preservation?
- Why Americans Need Wealth Preservation Strategies Now
- The Nine Building Blocks of Wealth Preservation
- Building Block #1: Government Protections
- Homestead Exemptions: Shielding Your Home
- Retirement Accounts: Safe, for the Most Part
- Building Block #2: Insurance Coverage
- Building Block #3: Safe Banking
- Building Block #4: Domestic Asset Protection
- Building Block #5: Estate Planning
- Building Block #6: Tax Optimization
- Building Block #7: Investment Diversification
- Building Block #8: International Strategies
- Building Block #9: Emergency Planning
- Protect Before You’re Exposed
The systems aren’t broken. But they’re bending.
US dollar risk, political gridlock, growing deficits – none of these are new. But together, they’ve become a signal. A signal that relying solely on “the way it’s always been” is no longer a plan.
That’s why more Americans are taking a fresh look at wealth preservation – beyond just returns or growth. The focus now? Keeping what you have. Making sure it’s protected. And building a structure that works no matter what happens in Washington… or Wall Street.
It can be a scary thing to do. It comes with obstacles and uncertainty. That’s why more than 15,000 clients since 1984 have trusted us to help them with this—so they can realize the benefits—instead of realizing mistakes.
In this article, we’ll walk you through the key tools and tactics that form the foundation of a smart, well-structured wealth preservation plan.
Think of it as a blueprint – covering everything from basic “Plan B’s” to global diversification structures that work in real life.
What Is Wealth Preservation?
Wealth preservation isn’t necessarily about getting richer. It’s about not losing what you’ve already built.
While wealth accumulation focuses on growth, preservation is about keeping your assets secure – no matter what the world throws at you. That means structuring your assets legally and strategically so they’re harder to attack, seize, or lose by mistake.
Here’s what that structure protects against:
- Political and economic shocks that ripple through markets.
- Currency devaluation and long-term inflation.
- Systemic risks in the banking.
- Government overreach through taxes.
- And yes, even poor investment decisions that lack proper planning.
Think of wealth preservation like a layered fortress. No single wall will stop everything. But the right combination – legal tools, tax planning, global diversification—makes your financial foundation harder to crack.
Why Americans Need Wealth Preservation Strategies Now
The financial landscape for affluent Americans is shifting rapidly. Here’s what’s driving the urgency:
- Banking System Instability: Remember the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank in 2023? Those exposed vulnerabilities in the banking sector. With the FDIC insuring only up to $250,000 per depositor per bank, large deposits remained unprotected.
- Escalating National Debt: At the time of writing, the US national debt stands at $36.8 trillion. Projections by the Congressional Budget Office indicate that interest payments alone will amount to $952 billion in fiscal year 2025 and could rise to $1.8 trillion by 2035. There’s a lot of concern about the dollar’s long-term stability.
- US Dollar Risk and Currency Erosion: While the dollar remains the world’s reserve currency, that status is under growing pressure. We’re now seeing more high-net-worth families hedge their exposure by holding assets in foreign currencies or hard assets like international real estate and gold.
These aren’t abstract concerns – they’re real challenges that investors are confronting today. Implementing robust wealth preservation strategies is no longer optional. It’s essential.
And Americans are already starting to take action: According to recent reports, enquiries from US nationals for residence and citizenship options abroad increased 183% in Q1 2025 compared to Q1 2024.
That’s not a trend. It’s a signal.
The Nine Building Blocks of Wealth Preservation
Every strong wealth plan is built from layers – legal, financial, personal. And like a well-engineered fortress, the right layers work together to shield your assets from risk, while keeping them flexible enough to grow.
Here are the nine essential building blocks we use in most wealth protection plans:
- Government Protections.
- Insurance Coverage.
- Safe Banking.
- Domestic Asset Protection.
- Estate Planning.
- Tax Optimization.
- Investment Diversification.
- International Strategies.
- Emergency Planning.
We’ll walk through each one – so you can see where your defenses are strong, and where your plan might need reinforcement.
Building Block #1: Government Protections
Before you set up any trusts or offshore strategies, it’s worth knowing that the law already gives you a few good tools to protect your assets.
These vary by state – but they form the first layer of any well-built wealth protection plan.
Homestead Exemptions: Shielding Your Home
Most states offer some protection for your primary residence from lawsuits. Homestead exemptions can range from nothing at all to unlimited.
- Strong protection: Florida and Texas offer virtually unlimited homestead coverage.
- No protection: New Jersey and Pennsylvania offer zero.
- Everyone else: Most states land somewhere in the middle. Caps are usually anywhere between $30,000 and $600,000 depending on the state. Kentucky, Tennessee, and Virginia have much lower exemption amounts at $5,000 each for single owners.
Retirement Accounts: Safe, for the Most Part
Retirement accounts have some of the strongest built-in protections available:
- 401(k)s and employer plans: Protected under federal law, with no dollar limit in most cases.
- IRAs: Protected up to $1,711,975 per person in bankruptcy (as of April 1, 2025).
These protections usually stay in place as long as the money stays in the retirement account and isn’t moved to something with fewer safeguards.
Limitations
- Protection levels differ widely by state.
- Some structures can undo these protections if not set up carefully.
- Only applies to specific asset types such as home equity and retirement accounts.
Bottom line? These default shields are useful – but not enough on their own if you’re serious about protecting multi-million-dollar wealth. Still, they’re the logical place to start.
Building Block #2: Insurance Coverage
Think of insurance as your financial shock absorber. It doesn’t stop bad things from happening—but it can stop them from destroying your net worth.
A lawsuit, accident, or medical issue can punch through thin coverage and leave assets exposed. That’s why insurance is one of the most practical and often cost-effective tools you can have in a solid wealth preservation plan.
Liability Insurance
- Professional liability: Critical for licensed professionals like doctors, attorneys, and accountants.
- General liability: Must-have coverage for business owners.
- Umbrella insurance: Adds extra protection once other policies max out.
Property Insurance
- Homeowners and renters’ insurance: Covers your residence and personal belongings.
- Auto insurance: Make sure limits are high enough to protect against legal claims.
Life and Disability Coverage
- Term life insurance: Affordable protection, especially for younger families.
- Permanent life insurance: May offer asset protection and liquidity in estate plans if structured correctly.
- Long-term care insurance: Helps prevent healthcare costs from draining retirement assets.
Key Considerations
- Avoid bargain-bin coverage. You get what you pay for.
- Review your policies annually—especially if your wealth, property, or family situation has changed.
- Consider an umbrella policy as an easy, high-leverage protection upgrade.
Insurance won’t prevent legal or financial threats. But it often determines how much damage they leave behind.
Building Block #3: Safe Banking
Most people assume their money is safe in the bank – until it isn’t.
A smart banking plan spreads risk – not just across accounts, but across systems.
Domestic Banking Tactics
- FDIC coverage: Only $250,000 per depositor, per bank, per ownership category.
- Bank health: Monitor your bank’s financial strength with independent rating tools, like Weiss Ratings. These can help you spot red flags before they make the news.
- Diversify: Use multiple banks – especially if your balances exceed FDIC limits.
International Banking: What It Does (and Doesn’t) Do
Offshore accounts can help diversify away from dollar exposure and domestic systemic risk – but they’re not secret (from Uncle Sam at least), they don’t provide inherent asset protection, and they’re not lawsuit-proof.
- Currency access: Hold euros, Swiss francs, or other non-dollar assets.
- System diversification: Reduce reliance on a single banking jurisdiction – so if one goes south, you have a backup in place.
- Legal compliance required: Americans must file FBAR, FATCA (Form 8938), and declare all offshore holdings.
- Strategic Viability: Offshore accounts are transparent to the US government – but are still very private against private creditors and the like, which can help make you less of a target in the first place.
Both the euro and Swiss franc (CHF) have steadily appreciated against the US dollar since January 2025.
Safe banking isn’t just about who holds your money. It’s about how, where, and under what legal framework. The right structure can protect your liquidity and preserve access—no matter what happens in the headlines.
Building Block #4: Domestic Asset Protection
If someone sues you tomorrow, what happens to your assets?
That’s the core question domestic asset protection tries to answer – with the right mix of LLCs, trusts, and other strategies.
These tools don’t stop lawsuits. But they make it harder – and more expensive – for creditors to reach what’s yours.
LLCs: Flexible and Effective
Limited Liability Companies are one of the most cost-effective ways to protect wealth.
- Separate business assets from personal liability.
- Shield assets from both business and personal creditors.
- Add privacy when formed in states like Wyoming or Nevada.
Top picks:
- Wyoming: Strong protection and anonymity at low cost.
- Delaware and Nevada: Popular for business and privacy needs.
Trusts: Not All Are Created Equal
- Revocable trusts: Good for estate planning – not asset protection.
- Irrevocable trusts: Offer strong asset protection, but only if you give up control.
- Domestic Asset Protection Trusts (DAPTs): A hybrid structure that lets you be a beneficiary – but they only work well in certain states.
Used properly, these tools can add real protection. Used wrong, they’re just expensive paperwork. The substance of the structure matters more than the structure itself.
Building Block #5: Estate Planning
A good estate plan does more than avoid probate. It ensures your family is protected, your wishes are followed, and your wealth is transferred with the least possible interference from courts, taxes, or creditors.
Core Documents
- Will: Directs asset distribution, names guardians for minors, and appoints an executor.
- Powers of Attorney: Authorizes someone to handle your finances or healthcare if you’re incapacitated.
- Living Will: Clarifies your end-of-life medical preferences. Part of your Advance Medical Directive (AMD), a legal document that lets you decide in advance the medical care you do – or don’t – want if you’re ever unable to speak for yourself.
Trusts: Know the Purpose Before You Pick the Type
Not all trusts offer protection. Not all trusts avoid taxes. The type of trust you choose should match your goals.
- Revocable Trusts: Useful for avoiding probate and maintaining control during life – but they offer no asset protection. Any assets not titled into the trust still go through probate.
- Irrevocable Trusts: Provide stronger protection and estate tax benefits – but only if you give up control. These must be tailored to your needs (e.g., charitable, spendthrift, or special needs).
Building Block #6: Tax Optimization
Taxes eat away at your wealth – year after year. A smart plan protects what you’ve built now, and later when you pass assets to your family.
Everyday Tax Strategies
- Retirement Accounts: Use 401(k)s, IRAs, and similar accounts to grow money without paying taxes right away.
- Tax-Loss Harvesting: Sell underperforming investments to offset gains and lower your tax bill.
- Asset Location: Put investments in the right type of account – some grow better in taxable accounts, others in tax-deferred ones.
- Charitable Giving: Donate assets or cash to reduce taxes while supporting causes you care about.
Estate and Gift Planning
In 2025, the federal estate tax exemption is $13.99 million per person. But that number could drop to around $7 million in 2026. That means more families could be hit with estate taxes soon.
- Annual Gifts: You can give up to $19,000 per person in 2025 without triggering gift taxes. Married couples can double that to $38,000.
- Use the Lifetime Exemption: Large gifts made now (while the exemption is high) won’t be penalized later, even if the limit drops. (Probably.)
- Charitable Gifts: Giving to charity during your life or in your estate can reduce the tax burden and help causes that matter to you.
The right moves now can save your family millions later.
Building Block #7: Investment Diversification
No one can predict the next crash or political crisis. Diversifying your assets helps make sure one event – or one market – doesn’t bring down your whole plan.
Types of Diversification
By Asset Class:
Spread your money across different types of investments, including:
- Stocks: Both US and international companies.
- Bonds: Government and corporate debt.
- Real estate: Direct property or REITs.
- Commodities: Gold, silver, and other hard assets.
- Alternatives: Private equity, hedge funds, or other non-traditional options (for qualified investors).
- By Geography:
- Keep some investments in US markets – but don’t stop there.
- Add international exposure through developed markets (Europe, Japan, Australia) and emerging markets (Latin America, Asia).
- Invest in real assets abroad – foreign real estate often plays a key role in our clients’ long-term strategies.
- By Currency:
- Hold assets in multiple currencies to reduce your exposure to the US dollar and hedge against inflation or currency shocks.
A Nestmann client bought property in Costa Rica but didn’t want it stuck in local probate for years. Instead of using a costly Costa Rican trust (called a fideicomiso), we helped him set up a Costa Rican SRL (Sociedad de Responsabilidad Limitada, a private limited company similar to LLCs in the US) to hold the property – and used a US LLC to own the SRL shares.
The result?
- Probate in Costa Rica could be avoided.
- Lower legal costs to set up and maintain.
- Easy integration with his US estate plan.
- With a local entity, it was easier to open a Costa Rican bank account.
Foreign real estate isn’t just an investment – it can be a gateway to global diversification, legal leverage, and better estate outcomes.
Building Block #8: International Strategies
International planning is often one of the strongest ways to protect wealth – by putting distance between your assets and potential threats.
Offshore Asset Protection Trusts
These trusts move assets out of your name and out of US court reach.
- Creditors face foreign laws and long delays.
- You no longer legally own the assets – the trust does.
- Top picks:
- Cook Islands: Court-tested protection, gold standard.
- Nevis: Lower cost with comparable strength.
Recommended Reading:
- Do You Really Need an Offshore Trust?
- Foreign Trusts: What They Are, How They Work, and Why They Matter
- Nevis Trust: Asset Protection, Privacy and Tax Benefits
Offshore LLCs
A foreign LLC creates a legal barrier between you and your assets.
- Greater privacy than most US LLCs.
- Creditors often limited to charging orders.
- Must be used carefully – impractical to hold US assets if you’re a US taxpayer.
Foreign Real Estate
Real estate overseas is more than a lifestyle choice – it’s a powerful wealth tool.
- Can open doors to foreign residency.
- Helps diversify out of the US dollar.
- Popular options (among our clients at least):
- Costa Rica: Favorable laws and planning flexibility.
- Portugal: EU access and Golden Visa options.
- Panama and Mexico: Proximity, US dollar use, and expat infrastructure.
Recommended Reading:
- Foreign Real Estate Investments for Americans: Why or Why Not?
- Buying Property in Mexico
- Buying Property in Costa Rica
- Real Estate in Costa Rica for Expats
Private Placement Life Insurance (PPLI)
PPLI combines investment flexibility with legal protection.
- Strong asset protection under local insurance law.
- Tax-deferred – or potentially tax-free – growth.
- Useful in estate planning and wealth transfer.
- Top jurisdictions: Bermuda, Barbados, Cayman Islands.
International strategies aren’t about secrecy – they’re about smart jurisdictional planning.
Building Block #9: Emergency Planning
Having a “Plan B” gives you options if conditions in the US deteriorate significantly.
Second Residency and Citizenship
Why it matters:
- Plan B residency or citizenship gives you the legal right to live, invest, or bank elsewhere.
- It can also unlock better mobility options for you and your family.
Popular paths Nestmann clients use:
International Access Tools
- Banking relationships: Open accounts abroad well in advance of when you need them. Depending on jurisdiction, it can take weeks to months.
- Foreign currency: Hold part of your assets in euros, francs, or other stable currencies to reduce dollar risk.
Emergency planning isn’t about escape. It’s about options. And options are power.
Protect Before You’re Exposed
The risks to your wealth are real: unstable banks, rising debt, shrinking tax breaks, and growing interest in offshore options. But the good news is: you have tools.
From basic protections to advanced international strategies, the key is layered planning – and acting before the threats show up.
If you’re ready to take the next step, schedule a call with a Nestmann Associate. With over 40 years of experience, we’ll help you build a plan that fits your goals, risk profile, and future.
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We have 40+ years experience helping Americans move, live and invest internationally…
Need Help?
We have 40+ years experience helping Americans move, live and invest internationally…
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