Life is full of uncertainties, and anything can happen at any time without warning. After working so hard to acquire assets, don’t leave it unprotected or you can lose everything in no time at all.
The more people realize your assets are vulnerable, the more you can be hit with fictitious lawsuits. Therefore, you need to protect your assets to make it almost impossible for creditors and other disgruntled partners to lay hands on them in a legal situation.
In doing this, you don’t need to reinvent the wheel, as there are several ways to defend yourself and assets from life’s uncertainties. Let’s look at 6 effective and proven strategies for projecting your assets.
1. Register Your Business Right
There are several types of business registration, and each comes with its pros and cons. You can register as a sole proprietorship, partnership, limited liability, or Business Corporation. However, registering your business as sole proprietorship comes with dire consequences in case of a lawsuit. With a sole proprietorship, you are solely responsible for the liabilities, profit, or loss for the company. It makes your asset a target whenever there is a lawsuit. To ensure adequate protection, you should instead register as a limited liability company (LLC).
2. Divorce Your Business from Personal Stuff
Some startup companies and entrepreneurs make the mistake of mingling business with personal life activities. Once you open a business run it as professional as possible. Always have a separate bank account for business, and use the business name for all business activities. Register business assets as such and documents must bear the company’s name. It saves the business and its assets from personal lawsuits. You can visit ProtectYourAssetsGA.com for more details on how to protect your assets.
3. Place Assets in Other People’s Name
One of the best strategies for protecting your assets is placing certain critical assets in other people’s name. It shouldn’t be anybody, of course, but people you can trust. This can be your spouse, children and trusted close family members. In this scenario, your creditors cannot attach those properties in a suit. However, beware that this comes with some disadvantages. If for example there is a divorce, your property can end up with your spouse.
4. Insure the Business and Assets
Running a business without an insurance package is the riskiest thing any businessperson can do. That said, you can’t just buy any insurance. It should be something that suits your business needs. So before settling on a package, consult a professional and choose rightly. The insurance should help take care of several suits that may come your way.
5. Be careful of the Contracts You Sign
It is said that the devil is often in the detail. Some contracts may look very enticing in the first few pages but within the middle or bottom lies the devil. Thoroughly read all the details before signing a contract. On the other hand, when drafting an agreement, ensure that you stay within the confines of the law and without ambiguities. A personal deal should remain so likewise business contracts. Unless needed, never list personal assets in a business contract.
6. Consider a Homestead exemption
Enrolling on a homestead exemption is another effective and proven way of protecting your asset. Available in most states, homestead exemption protects homeowners from creditors, and taxes among others. In case you apply for bankruptcy, those properties would be protected from any lawsuit.
If you adopt these proven strategies you should be improving your odds of successfully protecting your assets when challenged.
Tags: Business, Assets, Protection