Table of Contents
- Below are seven ways to protect your assets and properties
- Final Thoughts
Asset protection is useful for nearly anyone regardless of the financial stage a person is on. It can benefit a janitor who works in a banking institution the same way it comes in handy for a millionaire who manages the bank. The problem is that most people don’t think about protecting their assets and properties and only concentrate on gathering wealth. They only realize the importance of wealth protection when it’s too late.
It’s always best to be prepared. It holds no matter how secure you feel with your assets and properties. The world has become more litigious in this day and age. Your assets might easily make you a target for individuals looking to somehow profit from them. Unexpected damages or lawsuits can leave you not having a leg to stand on. That’s why it can’t be overstated how valuable the asset protection services offered by websites, like milehighestateplanning.com, nowadays.
No matter what form your assets and properties are in, you need to be proactive in protecting them, ensuring you’re safe from threats.
Below are seven ways to protect your assets and properties
1. Enduring Power Of Attorney
When you lose the ability to make decisions yourself, enduring power of attorney (EPA) can help save your wealth. It’s a legal document giving someone (a lawyer) the power to act on your behalf at some stage in the future. Note that there are two types of enduring power of attorney – one for personal care and welfare, and another for money and property. Choose the latter.
No one else will have the right to deal with financial or property affairs for you without an EPA.
2. Transfer All Assets Under Your Name To Protective Entities
Owning nothing while still retaining control of everything is one of asset protection’s basic tenants. You can accomplish it by transferring your assets to limited partnerships, trusts, LLCs, and other protective entities.
3. Maintain Corporate Veil
Congratulations on setting up an entity. However, don’t think that only having the articles of incorporation of the entity in your drawer will completely save you when creditors and lawsuits come. You still need to title the property in the company’s name if necessary, use the name of the company on all documents, and maintain a separate checkbook or bank account for your business. It’s also important to log the minutes at an annual meeting and maintain corporate records. Note that this type of annual maintenance also applies even for LLCs.
4. Separate Business Assets
A great source of liability are multiple companies that operate out of one company. In such a setup, your years or decades of investment and hard work can quickly be taken away by just one judgment or lawsuit against your company. That’s why you should work diligently to separate your businesses from your assets. Ideally, your operating company should only own as little as possible.
Take the assets that your business utilizes to function effectively. Separate them from your operating company to minimize risks. For instance, you can create separate companies that own assets, such as machinery, inventory, or equipment, on paper and lease the assets back to the operating company. By doing so, you’ll be able to reopen later as a brand-new business if the operating company gets sued and forced to shut down. You can, then, lease the assets from your other companies within their asset-protection portfolio.
5.Invest In An Insurance
A lot of professions might involve more insurance than others, including real estate and medical professionals. However, it’s always worth checking your own coverage. It’s easy to overlook insurance avenues, although it might seem obvious in this day and age.
All of your assets should have insurance, including automobile insurance and homeowner’s insurance. To ensure that you’re protected when an unforeseen accident happens, talk to a lawyer in your local area. Get the necessary assistance in reviewing your current coverage.
6. Encumber Your Assets With Liens
Making your assets essentially valueless is another way of making yourself an unattractive target for lawsuits. One way to do this could be holding lines of credit (LOC) against your assets (owing $450,000 on a $650,000 car).
7. Review Your Asset Titling
One common way a property is seized is through its titling. To ensure that you’re protected, review your asset titling. It holds for whatever property you have. Note that you’ll need to review your state laws since some states have titling exemptions. Determine the best plan that your situation requires based on the laws in your state.
Reviewing your asset titling is in connection with transferring assets to protective entities. Still, the ultimate goal is to protect you and your family just in case an attempt against your ownership is made.
The sooner you review the situation of your assets and check for weaknesses and potential errors, the sooner you can feel more comfortable, knowing you’re fully protected. Regularly speak with a trusted lawyer and implement the ways discussed above as soon as possible to avoid painting yourself as a potential target for frauds and litigations.