Asset Protection
Asset protection works as a safeguard of your corporate assets by keeping them out of reach from potential judgment creditors and enforcement actions. Neglecting to properly protect your assets can lead to a liquidation of your assets and equipment; resulting, in a forced sale of your hard-earned business. Even worse, if you are not following corporate formalities or have “pierced the corporate veil” a potential creditor could reach into your personal assets. Asset protection insures your company beyond liability and professional insurance.
Time is of the essence because asset protection will only protect future claims
Asset protection is achieved using a multi-entity structure of holding companies, leasing companies, management companies, and separate operating companies. The multi-entity structure separates business assets and many fixed assets into a leasing entity, separate and removed from the operating entity. If a lawsuit judgment were to exceed both the insurance coverage and value of remaining assets, the fixed assets of the new leasing entity would generally not be subject to the lawsuit. Allowing you to maintain your business and function with your secured fixed assets. Saving your business from a complete liquidation and possible bankruptcy.
Protecting your personal and business assets today, will give you peace of mind for tomorrow.
In addition to protecting your business assets, you should protect your personal assets. Personal assets can be protected using a trust, segregating the assets from claims that may arise from litigation. The use of trusts will also provide an additional benefit of minimizing estate taxes. Your estate will have to pay federal estate taxes if the value at death exceeds the exempt limit set by Congress. The Tax Cuts and Jobs Act of 2017 allows individuals gift and assets to pass to their beneficiaries, estate tax-free up to $11.2 million per person until 2025. Although this appears to be a large amount, a successful business owner can easily exceed this limit over a lifetime and there is uncertainly if the limit will remain after 2025. Even so, there are many non-tax reasons to protect your personal assets. Protecting yourself from divorce, creditors, and second marriages, is as equally important as tax planning.
