Strategies For Effective Asset Protection With A Corporate Lawyer

Your assets are what make up your financial worth. These can be anything valuable that you own as an individual or a business, or the skills you possess within a business, such as the ability to practice medicine. As such, assets are extremely valuable and worthy of every legal protection. Are yours adequately protected in the event of lawsuits, creditor claims, or accidents?

If you’re not sure, don’t worry: a skilled corporate lawyer can help you work asset protection into your financial plan.

Read on to learn more about what asset protection is, why it’s necessary, and what strategies you can implement.

What Is Asset Protection?

Asset protection, a key component of estate planning, protects individuals or businesses from legal actions that can result in extreme amounts of debt or taxation. Among those who have the most to lose without asset protection are business owners, particularly those with employees. They can be subject to lawsuits in the event of any injuries or damages. Other professions that benefit from asset protection include surgeons or physicians; any highly paid professional.

Asset protection can also be necessary in the event of a divorce, regardless of whether you own a business with your soon-to-be ex-spouse. This form of protection helps prevent one spouse from being left high and dry without any compensation or possessions if the other spouse claims everything, including full ownership of a business. Anyone currently married can benefit from asset protection with a corporate lawyer.

Asset Protection Strategies

Now that you know what asset protection is, you may be concerned about how to protect yourself. With the help of a corporate lawyer, you can start making changes today to your estate or business plan to avoid the consequences of a worst-case scenario.

Some of these changes include the following:

Plan Ahead With Your Business Plan

There are many instances in which tax bills or lawsuits are filed too late to protect certain assets. That means asset protection should be part of your business plan from the very beginning of its inception, rather than something you put on a to-do list for later after it’s already up and running.

Turn Your Business Into An LLC (Limited Liability Company)

One of the most common tools for asset protection, LLCs, help protect real estate, vehicles, and more from malicious claims against the owners of an LLC. Less catastrophic, but still important, this type of business can better manage taxes by avoiding double taxation on corporate profits.

Have An Asset Protection Trust

This type of trust safeguards assets from creditors and lawsuit claims against a business or an individual. Some of these trusts are based offshore for additional safeguarding.

Consider Limited Family Partnerships

This type of partnership allows family members to be made into limited partners for managing estate taxes, or other assets you wish to protect.

Consider A Retirement Account

A 401k or traditional IRA account allows employees to keep their hard-earned money behind the protection of federal law. These accounts are protected even after filing for bankruptcy and are generally much better protected than any personal assets held in individual or joint accounts. Levels of protection vary by state, but a corporate lawyer can help you determine what types of protection are available for your retirement account.

Have Insurance

The ultimate non-negotiable in asset protection, insurance has saved many businesses or land owners from disaster in the event of injuries, damages, and more. Should such calamities occur, the financial burden falls onto the insurance company, not the policyholder, keeping assets safe.

Don’t Flaunt Your Assets

Discretion is an invaluable tool for protecting yourself or your business from loss. Those who live in such a way that flaunts their assets are more likely to be targeted by a legal claim: valid or not.

Asset Protection Strategies For Landowners

In the State of Florida, there is a powerful asset protection tool known as the homestead exemption. This protects an individual’s home from debt collectors, with no limit to its value. This exemption is backed by the state’s constitution; however, a home must meet the following requirements to be protected:

• It must be the debtor’s permanent residence;
• The lot it sits on must be within certain limitations of acres;
• It must be in the name of the debtor.

Of course, one of the best forms of asset protection for landowners is insurance. Homeowner’s insurance can be a lifesaver in many undesirable situations, from hurricane damage to liability from rental properties. Rental properties can be put into separate LLCs to separate them from additional assets.

Asset Protection Strategies For Businesses

Small business owners can keep their assets separate from their business ones, which frees them from personal liability in the event of any negative claims against their company.

Of course, no one wants to consider this happening, but it’s always better to have protections in place that you may not use, rather than find yourself out to dry if the unexpected happens. Separate assets allow business owners some protection from the fallout of any lawsuit or claim.

Business insurance is another beneficial way of protecting professional assets. The type of coverage most suitable for your company could include worker’s compensation for any employers, or business interruption insurance that protects you from financial loss in the event of a disaster (think hurricanes or COVID-19).