5 Asset protection tips everybody should know
Written by admin on May 11th, 2011It doesn’t matter how much money you make or how much you have saved – there are certain asset protection tips everybody should know, and there is no excuse for not being familiar with them.
Assets can be property, goods, a business or money you have saved or inherited. The term refers to anything of worth that you have and that someone else may try to take from you, whether it is in the form of a tax lien for unpaid taxes or the settlement of a lawsuit.
Having identified what you have collected and wish to hang onto, the question then becomes what is the best way to protect the assets you have worked to obtain?
Here are some tips everyone should be familiar with no matter what your bank account size:
1. Keep a low profile. Although it is unpleasant to think about, America is one of the most litigious countries in the world, and people file frivolous lawsuits every single day. However, they are less likely to file a lawsuit against you or your estate if they do not think that you have the money to pay a settlement. Similarly, lawyers are less likely to take on a potentially frivolous case if there are no assets in question.
2. Separate your assets. Again, although it is unfortunate, lawsuits are a reality and effective asset protection has to address the potential fallout of these lawsuits. If you keep your assets held by separate Limited Liability Corporations (LLCs), then an unfavorable judgment in a lawsuit against one property may not be able to affect the other assets.
3. Avoid general partnerships. General partnerships allow each partner a great deal of authority over one another. If you are in a general partnership, your partner can make major decisions and agreements on behalf of the partnership without consulting you, such as signing for a large loan. Although you were not there when the loan was procured, as a general partner you will be responsible for the repayment of that loan.
4. Keep good insurance. No matter how confident you feel about your asset protection plan, good insurance is an absolute necessity, from car insurance to your homeowners’ policy and everything in between. Under-insuring leaves you and your estate at risk.
5. Get good advice. Speak to a trusted and experienced lawyer and take his or her advice into account as you create a comprehensive estate plan that protects your assets.
When you have worked hard to build an estate, you should take the necessary steps to protect your assets from unforeseen problems or frivolous lawsuits.
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