Protecting assets is one of the first things business owners start worrying about as soon as their profits start multiplying. Numerous ways exist to keep the assets safe legally without making too much effort. However, the first step still needs to be made. And it’s doing research.
If you are thinking that protecting assets is stashing all of your money in offshore accounts and trying to avoid taxes, you haven’t done your homework. The majority of asset protection methods are 100% legal. With over 40 million lawsuits filed in the USA each year, it’s smart to start thinking about asset protection now.
Let’s take a look at the most efficient ways to protect your assets.
1. Open An LLC
LLC is a limited liability company. Creating an LLC means that you won’t be held personally liable for your company’s problems. In short, if a lawsuit is filed against your company and the court makes the decision for it to pay, only the company’s funds will be under attack. Your personal possessions will be unreachable.
With an LLC, you don’t have to worry about your home or car being taking away from you. All you can lose in case of a problem is the business.
In a few cases, a business owner may be held liable. For example, if the person injures another person directly. Or if the owners fail to pay taxes.
2. Use an Offshore Asset Protection Trust
Offshore asset protection trusts are among the most popular ways to take care of your assets. Funds that you send abroad aren’t subject to extraction by creditors. If the court rules that you are responsible for paying a certain amount, you can only pay it using the assets you have in the country.
In case creditors decide to go further and try to extract the money from your offshore accounts, they would have to go into a legal battle with the offshore trust jurisdiction. These jurisdictions are usually keen on protecting offshore clients.
Experts offering asset protection services by CS&P point out that struggling to get your money from offshore accounts is quite expensive for the creditor.
3. Take Advantage of IRS Plans
The government is offering you many ways to protect your assets in order to have money when you retire. 401K and Defined Benefit Pension plan are among them.
If your money is in the pension fund, creditors don’t have any access to it. Meaning that even if your business goes bankrupt, you’ll still have your assets safe for your retirement needs.
A custom-made retirement plan isn’t just a good idea for asset protection purposes, it can offer substantial tax savings.
4. Get Insurance
One of the simplest yet not-so-cheap ways to protect your assets is to get extra insurance. An umbrella liability policy is an excellent way to keep your assets safe. This insurance is the next step after your regular home and vehicle insurance plans. For example, you can get insurance against a lawsuit filed in case a car accident is ruled to be your fault.
Umbrellas can protect you from different lawsuits, such as someone being hurt in your home or bitten by your dog. Umbrella policies are different and require close studying. However, they can be a great way to keep you protected.
5. Consider Trusts
Creditors won’t take away your assets if you don’t have any available. You may want to transfer some of them to an irrevocable trust. Family members can take advantage of the funds in the trust while creditors can’t get their hands on them.
Asset protection is extremely important for your well-being and peace of mind. Start thinking about it today.