While asset allocation (AA) determines what assets to own and in what proportions, Asset Location (AL) determines where those assets are held. While the objective of AA is to create portfolios with the greatest return for a level of risk, and to optimize individuals’ risk exposure according to their risk tolerance, goals and investment time frame, the objective of AL is to maximize the benefits of different account-types – usually to minimize taxes. There are other objectives that can be personal (e.g., the liquidity of the wealth, the expected use of the funds, privacy, etc.).
If you are considering using property as an investment or even looking to diversify a portfolio using real estate as a tool, a real estate attorney needs to be consulted.
Please contact us today to speak with a professional real estate lawyer before you purchase and or sell investment property.
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