In life as we go along the journey you come to accrue certain items along the way that are deemed of value. These can be regarded as your assets, owned by a person or company, they have value and available to meet debts, commitments, or legacies.
These can be property estate, goods or belongings that you may have accumulated through an inheritance or whether through owning your own business. You benefit in some way in owning and having these assets therefore there are ways in which you’ll need to protect your assets.
For instance let’s say you run your own business choosing the right business entity can go a long way. There will certainly be multiple tax-planning considerations, but operating as a sole proprietorship definitely isn’t your best choice for asset protection.
This is because your personal assets can be completely exposed to a potential lawsuit. Setting up an entity, such as a limited liability company (LLC), is an important step in the development of your business and protection of your assets.
Also maintain your corporate veil, if you’ve set up an entity. You need to maintain a separate bank account and cheque book for your business. Also use the company name on all documents and title the property in the name of the company if necessary. Most important, maintain corporate records and log the minutes at your annual meeting.
Another way to protect your assets is to review all jointly held accounts. Any money you deposit into a joint account with your children, spouse, elderly parents, roommate, or business partner is at risk.
If the joint owner files for divorce, incurs a tax lien, or lawsuit judgment, the entire account could be wiped out. Therefore if there’s a need for a joint account, keep the balance as low as possible. These are just some of the tips that you can consider when it comes to protecting your assets.