Protection

What it is: An audit of your "Human Capital" hedge—specifically your life and disability insurance—and the legal structure governing it. This marker measures the gap between the future income your family relies on and the capital that would actually be available if you were no longer able to work or were no longer present.

What it tells you: It identifies your solvency risk and tax exposure. It answers two hard questions:

Is your family’s lifestyle backed by a bulletproof financial structure?
Have you accidentally made the IRS a 40% beneficiary of your protection?

Why This Matters Financially

Your greatest asset is your ability to earn an income over the next 20 years. If that asset is destroyed without protection, your entire financial plan shifts from "growth mode" to "forced liquidation." Furthermore, if that protection isn't structured correctly, much of it will be lost to taxes.

The "Triple Loss" Example:

Imagine a household requiring $15,000/month to maintain their lifestyle. The primary earner has a $5M life insurance policy but owns it in their own name.

The Income Loss: If the earner becomes disabled or passes away, the primary "wealth engine" stops. Without private disability or life insurance, the family must begin selling off stocks or real estate—often in a down market—to pay the bills.
The Tax Trap: Because the earner owned the $5M policy personally, it is included in their taxable estate. At a 40% estate tax rate, $2,000,000 of that protection could vanish to the IRS before the family sees a dime.
The Forced Liquidation: To pay the remaining estate taxes on other assets (like a family business or home), the heirs may be forced to sell those assets at a "fire sale" discount because they lack the tax-free liquidity a trust would have provided.

How You "Lose" Money:

Structural Negligence: By simply having the wrong name on the "Owner" line of a policy, you effectively volunteer a massive portion of your legacy to the government.
The Compounding Halt: Every dollar taken for taxes or used to cover "survival" expenses is a dollar that stops compounding for your children and grandchildren.

The Risk: You lose money through exposure and titling errors. True protection requires two layers: the Capital (the insurance policy) and the Wrapper (an Irrevocable Life Insurance Trust). Without the wrapper, your "safety net" has a massive hole in it.

Protection

What it tells you: It identifies your solvency risk and tax exposure. It answers two hard questions:

Is your family’s lifestyle backed by a bulletproof financial structure?

Have you accidentally made the IRS a 40% beneficiary of your protection?

Why This Matters Financially

Your greatest asset is your ability to earn an income over the next 20 years. If that asset is destroyed without protection, your entire financial plan shifts from "growth mode" to "forced liquidation." Furthermore, if that protection isn't structured correctly, much of it will be lost to taxes.

The "Triple Loss" Example:

Imagine a household requiring $15,000/month to maintain their lifestyle. The primary earner has a $5M life insurance policy but owns it in their own name.

The Income Loss: If the earner becomes disabled or passes away, the primary "wealth engine" stops. Without private disability or life insurance, the family must begin selling off stocks or real estate—often in a down market—to pay the bills.

The Tax Trap: Because the earner owned the $5M policy personally, it is included in their taxable estate. At a 40% estate tax rate, $2,000,000 of that protection could vanish to the IRS before the family sees a dime.

The Forced Liquidation: To pay the remaining estate taxes on other assets (like a family business or home), the heirs may be forced to sell those assets at a "fire sale" discount because they lack the tax-free liquidity a trust would have provided.

How You "Lose" Money:

Structural Negligence: By simply having the wrong name on the "Owner" line of a policy, you effectively volunteer a massive portion of your legacy to the government.

The Compounding Halt: Every dollar taken for taxes or used to cover "survival" expenses is a dollar that stops compounding for your children and grandchildren.

The Risk: You lose money through exposure and titling errors. True protection requires two layers: the Capital (the insurance policy) and the Wrapper (an Irrevocable Life Insurance Trust). Without the wrapper, your "safety net" has a massive hole in it.