Asset protection is important for everyone, regardless of their financial stage. Whether you are a CEO or a schoolteacher, wealth management is imperative for your future. Asset protection places titles on your assets (be persons or businesses), so they are out of reach. Here, we discuss six tips for safeguarding assets.
1. Utilize Protective Entities
It is harder for creditors and litigators to claim assets when they are tied to protective entities. Here’s what you need to know:
- Transferring your assets to those you trust can protect your wealth without obtaining ownership.
- Some examples of protective entities include trusts, partnerships, escrow accounts, and specific businesses like LLCs.
If you are a property owner and need to pass off your property to a tenant you trust, ensure that you’ve included a credit check for landlords to ensure that the person you select is truly capable of protecting your asset.
2. Equip Your Asset Protection With Financial Support
You can better protect your assets from threats with asset exemptions and insurance. Some states allow for asset exemptions and insurance, which guarantees protection for specific assets such as retirement funds, primary residences, and life insurance.
By providing the right financial support to back your asset protection, you can safeguard your assets even more from creditors and protect yourself from lawsuits.
3. Separate Your Company Assets
Your business assets should be separated to protect all assets entirely. The reason to divide assets is to protect the assets of the operating business.
The operating company should break down assets and pass them off to separate companies for each asset, i.e., one asset goes to one company, machinery goes to another, etc.
If the main business is sued, it can emerge as a new company of individual sellers and have preserved assets that were not taken.
4. Protect Assets With International Protection
International protection laws are often more involved than those in the U.S. Plus, international creditors are less likely to recognize an American order, and, therefore, assets that protect international entities are much more challenging to make claims against.
Due to the various laws and regulations that protect the entity in the country it was established, working through protections introduced by domestic jurisdictions also represents additional hassles for creditors, discouraging them from making claims on your assets.
5. Work With An Estate Planner
Working with an estate planner can help you brainstorm the best ways to safeguard your assets and make the most of your retirement and future plans. You can discuss important subjects like designating power of attorney and the insurance options that may pertain to your assets. It is always advised to get a professional’s opinion to prevent oversights.
6. Stay Insured With CICs
With Captive Insurance Companies (CICs), businesses and individuals can stay insured when standard insurance cannot cover a particular liability. With this added coverage, assets are better protected, as this additional support may not be available through traditional insurance. Plus, the policies of CICs are intended to cover the risks that may be unlikely to occur for the sake that they are protected if and when they arise.
Take Steps To Protect Your Assets Today
Safeguarding your assets means taking preventative measures to protect them against external threats. Creditors and litigators interested in your assets are only sometimes successful. Take steps to protect your assets today. The more protected, the stronger chances are of avoiding these threats.
