Asset protection keeps you out of court and protects your business.
You put so much time, energy and hard work into your business, but do you have a plan to protect your assets in this lawsuit-happy society? If not, the good news is that doing so takes no more than two hours. Asset protection is a legitimate and proactive strategy that safeguards your small business against lawsuits, judgements and even creditors so that you have fewer assets in your name for other people or companies to take.
Asset Protection Can Help Keep You Out Of Court
Almost all lawsuits are settled out of court, and if your small business has an asset protection plan, you?re in an even better position for fair negotiation that keeps you out of court. Suing someone requires considerable time and money. If you disclose up front that you have very few assets, with documentation explaining why and listing your assets, people or companies are less likely to follow through with lawsuits.
Asset Protection Can be Flexible
Depending on your needs, circumstances and the nature of your small business, you can use one or several options. For one thing, if you live in a state that follows separate or common property laws versus community property laws, putting assets in your spouse?s name is one viable asset protection strategy. If that doesn?t fit your situation, several states have domestic asset protection trusts in which you relinquish legal ownership of your possessions but remain the beneficiary of the trust. However, only assets included in the trust before a creditor took legal action are included.
Offshore bank accounts and trusts are another option, albeit one that requires a little bit of a headache and money to set up. Basically, to collect a judgment from you, someone would have to petition the country in which you have your asset protection set up. It?s an incredibly expensive hassle that often mandates higher burdens of proof and no sure bet of success. It often offsets the motivation to sue.