If you are in business, be it small such as https://wpbtowingservice.com/ or gigantic such as Google, you will understand the importance of protecting your brand, and more importantly your assets. Fundamental asset protection starts with implementing simple, affordable and true-and-tried strategies that will bear results. There are already laid down plans you can use to have your business covered.
The best offense is usually reliable defense. The world is growing increasingly litigious. The more assets you have, the more tempting you become a target for those looking to open lawsuits against you. There are a couple of ways you can use to protect your business from lawsuits and other forms of exploitation. Here are some of the ways to go about it.
Increase your liability insurance
The first line of defense you should employ in litigation should be insurance. You need to call your insurance broker and increase your liability limits. Ensure that your umbrella liability covers an amount that reflects your actual net worth. For example, if you are looking forward to getting $10 million from your Estate, inform your insurer that you want a $10 million umbrella liability policy.
Consider keeping all the assets separate. Depending on the state you live in and your wealth source, when you deposit money in a joint account, this money might instantly become half theirs. For some people, this may not be an issue, but to others, it is a huge problem. If you would like your spouse to have some ownership of your windfall, talk to your attorney and keep assets in a separate account.
Protect yourself from renters
If you are looking forward to investing in a rental property or if you have a rental property, you need to create a business entity such as an LLC or corporation. This is meant to shield your assets from disgruntled tenants. In case a renter sues you for say $5 million, they can only attack the entity that holds the real estate because the rest of your wealth is well protected. Create a different business entity for every rental property to protect every single property.
Formalize all informal partnerships
Note that business partnerships are always ticking time bombs. Just like the way joint accounts are, you are entirely responsible for the actions of your partner. Unlike what we know with joint accounts, a lawsuit against your partner can equally put all your assets at risk. An example is, suppose you and your friend do have an informal agreement to provide some form of consulting services. In case your partner is involved in some mess on the way to a client, all your assets can be at jeopardy. Always avoid partnerships. Form an entity such as an LLC or corporation to protect you legally.
It is essential to create business entities to shield assets. A business entity will shield your assets from lawsuits against your company. You should also review all jointly held accounts. Any money that you deposit to your joint account with your children, roommate, elderly parents and business partners is all at risk. If the joint owner by chance files for divorce or incurs a tax lien, the whole account can be wiped out.