No matter how secure you feel in your wealth, it’s best to always be prepared. Unexpected lawsuits or damages can leave you without a leg to stand on. In this day and age, the world is becoming more and more litigious, and your assets might make you a target for those looking to profit from it in some way. You need to be proactive about protecting your assets, no matter what form they’re in, to ensure you’re safe from any threats. Here are five ways to protect your assets.
5. Ensure your business assets are under a business entity
If you’re operating your own business, no matter the size, you need to protect your liability. It’s important to separate personal assets from business assets. This means establishing a business entity such as a partnership, LLC, or Corporation. If you’re conducting business as a sole proprietor, you open yourself to a great deal of personal liability. If someone comes for your business assets, this can easily spill into your personal assets as well since there is no official separation of the two. Speak to an accountant or tax professional about the best business entity for your situation.
4. Invest in the right insurance
This might seem obvious, but it’s easy to overlook every avenue of insurance. There are a lot of professions, like medical professionals and real estate professionals, that might involve more insurance than others, but it’s always worth checking your coverage. You should have insurance on all of your assets, including homeowners insurance and automobile insurance. Find a lawyer in your local area who can assist you in reviewing your current coverage to ensure you are protected in case of an unforeseen accident.
3. Review your asset titling
One of the most common ways property is seized is through the titling. You should review your asset titling, whether it is the title of your home or other property, to ensure you are protected. Some states have titling exemptions, and you will need to review your individual state laws to determine the best plan for your situation. Ultimately, you want to protect yourself and your family in case an attempt is made against your ownership.
2. Release your ownership if necessary
If you feel your assets are being threatened, your best plan of action might be to get rid of the assets altogether. If creditors are seeking your property, transferring ownership to a trust accessible by a trusted party might be the best way to ensure safekeeping. You might also be able to gift the asset to a family member or other trusted individual outright, though there are some taxing regulations on this depending on how much the asset is worth. Speak to a lawyer before releasing ownership to ensure you are doing it through the correct channels.
1. Consider your retirement plan
Your retirement plan is under the protection of the federal government and also the state government, in some instances. Moving money you don’t anticipate needing into these accounts is a safe way to protect it until you’re able to access the account freely. Ensure you will not need to access these funds until you’re of age to avoid unnecessary fees or loss of assets. Once again, speak with a lawyer regarding the unique laws of your state.
The takeaway: protecting yourself is important
When it comes to protecting your assets, you shouldn’t delay. The sooner you review your situation for potential errors and weaknesses, the sooner you can feel comfortable you are fully protected. Avoid painting yourself as a target for potential frauds and litigations. If you speak with a trusted lawyer regularly and review your state laws, you are in good condition to keep your assets protected.