Building your assets can take years but losing them only takes a couple of weeks or a few
months. Losing your hard-earned and well-deserved money can be a nightmare and it also may negatively impact your financial health and relationships, ruining everything you have worked for. Many people don’t truly understand the importance of protecting their assets. It may seem like something so minor that we shouldn’t even waste our time on. So, today, let’s take a deeper look into asset protection plans.
Why Must We Protect Our Assets?
First off, let's discuss why asset protection is so vital. Asset protection is a form of risk
management that aims to protect your assets from lawsuits, bankruptcy, or creditors coming to collect.
An asset protection plan employs legal strategies that can help prevent the seizure of your assets. If you haven’t already put an asset protection plan in place, I would recommend doing it right away. The longer your plan is in place, the stronger the plan will be.
The kind of assets you own will determine the asset protection strategy best for you. Today,
we’re going to look at some proven ways to keep your assets and properties safe from any
Start Planning Before A Claim Rises
There are many things you can do before liability arises, but very few things afterward. This is because whatever you do after a claim arises can be considered as "fraudulent transfers" by the law.
Moreover, you never really know when a claim or liability can arise. And that's why it's much
better to protect your assets and properties before any such claim rises which can open doors to thousands of other money-draining liabilities such as attorney fees and possible bankruptcy.
It’s always better to be safe than sorry!
Asset Protection Planning Is Not A Substitute for Insurance
Asset protection planning is supplement insurance, not a substitute for liability and professional insurance. The asset protection plan only protects your assets. It doesn’t cover any possible legal fees to defend against a lawsuit.
Having proper insurance alongside your asset protection planning will cover any supplementary charges related to the lawsuit. The insurance company will pay to defend and settle the lawsuit.
Put A Fine Line Between Your Personal Assets And Your Business Assets
Choosing the right business entity is only viable when you actually own a business.
If you are a business owner, create a business entity such as a corporation or a limited
partnership. By doing this you’ll be able to transfer all your business assets under the company name. On the other hand, if you consider setting up a sole proprietorship, your personal assets are completely exposed to potential lawsuits. With sole proprietorships, there is increased personal liability which can risk your personal assets.
Putting your personal assets into a business entity only leaves the potential for creditors to come after your assets and you to completely lose them. Your personal assets belong in a trust. There are several laws that protect such trust funds if you properly draft and fund them.
Protect Your Intellectual Property
Your intellectual property consists of any inventions, literary or artistic projects, symbols, names, and any other products created by your intellect. Protecting your intellectual property means that other people won't be able to steal your inventions. Some examples of intellectual property protection include copyright, patents, and trademarks. Several consultancy firms work with you to draft such protection documents.
These are your assets too. They consist of assets that you have created and are of value to you.
Do not let these assets slide. Protect them and make sure that nobody wrongfully steals them from you.
Properly Use Contracts and Follow Procedures
Your assets are the most valuable things you own. And the fact is, they can be taken away from you in a second. Ideally, we want to avoid any loopholes and frauds in your contracts and procedures.
Make sure all agreements, contracts and everything related to your business or personal assets are authentic. To be on the safe side, consult a legal and tax advisor as well as an asset protection specialist. These measures may seem extreme but they protect you, your assets, and your business from any liability that could cost you a fortune.
All of this does have an expense too but it's a lot less than compared to court fees and legal fees if any discrepancy is ever found in your business history.
Consider Umbrella Insurance
Umbrella insurance is a type of insurance that covers everything your other insurances leave out, both personal and business. This is a cost-effective way to obtain extra liability coverage.
However, umbrella insurance doesn't cover any criminal or fraudulent activity.
Also, umbrella insurances have a limit to how much they cover so make sure you properly
review your insurance plan before agreeing to anything.
Consult A Financial Specialist
A lot of us don't have time for all of these extra time-consuming activities. Our everyday lives are already caught up in balancing our homes, work-life, and more.
And that’s why FYE Finance is here to protect you and your assets!
If you have questions about the type of assets you own and which protection plan you should go for, you can book a tailored consultation session with our financial advisor. You can get a proper plan drafted on what to do next. Our financial coaching consultation is designed to discuss a client’s financial coaching needs. All your questions about your financial worries can be solved.
So, what are you waiting for? Book your appointment today and start your asset protection
program as soon as possible!
As mentioned earlier, when it comes to protecting your assets, it's always better to take action sooner than later. Being proactive about protecting your assets can also protect your mental health, personal relationships, and financial future from any external or internal threats. Go through the points mentioned and start your asset protection plan without any further delay.
Having a proper plan in place by securing your and your family’s future is more important now than ever.
In fact, when it comes to protecting your assets, be prepared like Maya Angelou says in this