4 Essential Asset Protection Strategies
Owning your own business comes with an array benefits and drawbacks. A common reason prospective owners are wary about operating a business is the fear of being taken to the cleaner’s in court over a lawsuit. Your personal assets are valuable, and action must be taken to protect them. Thankfully, many strategies designed to protect your assets are available and easy to grasp, even for those without extensive knowledge of the law. Let’s break down four simple, yet effective tactics you can implement to ensure your wealth is preserved in the event of a legal situation.
1. Structure Your Business Properly
Use LLCs (limited liability company). In America, an LLC is a form of legal protection business owners to absolve themselves from liability in many circumstances. While not corporations themselves, LLCs are accompanied with much of the same flexibility. In terms of asset protection, functioning as an LLC affords the owner a far-greater deal of security than an otherwise unincorporated entity. In most jurisdictions, LLCs prevent creditors from seizing the company and its assets because of a charging order. The charging order states the LLC won’t be forced to pay the creditor, and even if the creditor is paid out based on your discretion, he or she has to pay taxes on the awarded funds; this is a crucial provision for business owners.
2. You Can’t Lose Anything Not in Your Name
A common legal strategy many people employ is not having a significant amount of non-exempt assets in their name. If you have a spouse, this can be a relatively simple process. Of course, this requires a stable, trustful relationship as it involves transferring assets once in your name to your spouse. Your home, your car, the money in your bank account are examples of assets to transfer to a spouse to ensure protection from seizure.
3. Safeguard Yourself From Asset Searches
Before getting sued, attorneys will run an asset search on you. This involves utilizing public records to get a general assessment of your wealth. If you do not have someone in your life who you trust to hold onto your non-exempt assets, then you need to expunge your name from as many public records relating to what you own as possible. For example, setting up a title holding trust for your car prevents your name from going public. There are many legal tools available to you in this regard, so you are going to want to consult with a professional, which brings us to the final tip.
4. Consult ProAdvocate Group
ProAdvocate Group offers a free initial consultation with no strings attached. Asset protection is complex and can be a headache to a non-professional. There’s a bevy of other useful tactics in addition to the aforementioned tips, such as proper insurance, asset protection trusts for those with sizable bank accounts, and much more. ProAdvocate Group provides top-notch assistance in defending what’s precious to you. Contact us today for more information concerning asset protection.