Whether or not you own a business, the protection of your personal or business assets should be a priority — but not something that keeps you up at night. While unforeseen events can make you unexpectedly vulnerable, most risks to such major assets as your home, rental properties or businesses can be avoided through these 4 asset protection strategies.
Here are four simple but effective strategies for minimizing your exposure with just a little sensible planning.
Do right. Not all lawsuits can be avoided by good conduct, but it’s certainly a good place to start. Pay your bills on time, live within your means, and always do the right thing in your interactions with business partners, vendors, lenders and customers. At home, deal above reproach with your contractors and vendors, and it should increase your sense of security considerably.
Get it in writing. Professionally written leases and contracts explicitly spell out terms and conditions. This will usually discourage legal action against you. But don’t simply find a contract template on the Internet and think that it will serve your purposes. Letting a lawyer study your situation and draw up your paperwork is a small investment in peace of mind. On a similar note, be sure to always consult a lawyer if asked so sign a contract or lease.
Carry adequate insurance coverage. This can mean liability, malpractice and/or umbrella policies, depending on your type of business, as well as adequate auto and homeowners insurance for your personal property. And that might just be a start, depending upon your circumstances. So begin with a frank discussion with a trusted agent. Then periodically check in to make sure you’re still well protected if your circumstances change or your assets increase. Nobody likes to talk insurance, or practically beg an agent to sell you more of it, but the strategy will be well worth your time.
If married, consider joint asset ownership if you own a business. Creditors can’t come after your home or other personal property if one marital partner owns the business being sued and both partners jointly own the home. After all, it wouldn’t be fair to the partner with no business ownership to lose such a valuable asset. Obviously, if you and your spouse jointly own the business, you could both be vulnerable to confiscation of your home. Consider your ownership strategy carefully — and with professional help.
The bottom line is that asset protection can reduce your exposure considerably, but it doesn’t happen by accident. Sit down with a lawyer who practices this kind of law and come up with an asset protection strategy that’s tailored to fit your needs. Call us at Felinton Elder Law & Estate Planning Centers and we’ll put your mind at ease.