10 Critical Factors To Lowering Homeowner’s Risk
For 29 years, I have worked for no money-, new money-, faux money-, and old money clients. I can’t always tell which is which, no matter the brand of cars parked in the driveway, the size of the home, or how they dress. But one thing is crystal clear, I know which ones have learned lessons from the past and learned to protect their assets and their wealth with the following action steps.
They:
1. Create a business entity using something other than their name to title their home and engage in contracts. This entity is typically an LLC or a corporation. At the highest levels of wealth, I often don’t know (and don’t ask) the principal’s name. They create business email addresses for staff using the LLC or corporation URL, not staff@kellyforedixon.com.
2. Hire seasoned household management instead of someone transitioning into the industry. This cuts their losses for training someone who might not be suited for private service. It’s also helpful to know their past employers and the level of service expectations that were this staff member’s norm.
3. Require that all contractors provide valid liability and worker’s compensation insurance certificates before starting work on the property. In as much as you may have hired highly qualified contractors, sometimes, they hire not-so-vetted staff to help with their work. It’s hard to know if everyone on their team has been properly vetted, so covering your liabilities from all angles is in your best interest.
4. Increase their liability insurance and workers’ compensation coverage in case one of their contractor’s policies lapses. If they miss a payment, you’ll be covered.
5. Require signed a non-disclosure agreement from everyone who works or visits. This should outline expectations like no guests, photography, and publishing any personal knowledge about the homeowner.
6. Have two safes and have added locks on the doors into their master suite and offices. One for the principal’s small valuables like cash, jewelry and watches, passports, important documents, and sensitive medications. The other one is for their house manager for HR records, petty cash, and sensitive information. Locked doors will keep wondering visitors from the no-go areas. Particularly in bigger homes, on busy days, it’s hard to keep your eyes on all contractors working throughout your home.
7. Create household protocol as a staff and contractor memorandum of understanding to outline safety, security, service, and property protection expectations.
8. Install security cameras at their driveway entry gates, exterior doors, and interior rooms that house their most valuable assets. This allows your house manager to sit at their desk and monitor comings and goings without running throughout the property to allow guest entry and to ensure that everyone has left for the day.
9. Utilize an HR management company like Gusto to provide benefits and payroll services. They also use a time tracking app for their household staff so that regular hours, overtime, and breaks comply with state and federal guidelines.
10. Prepare for emergencies for all medical emergencies, manmade and natural disasters. Equipment is serviced regularly, and supplies are inventoried and rotated regularly. Staff is trained and certified, and drills happen like clockwork, so everyone knows what to do when the worst-case scenario happens.
When your wealth grows, so does the liability. These measures protect your most precious assets when the household staff is busy and the homeowner is off living their best life.
