It is common to assume your personal assets do not need the same protection as those of your business, but that is not true. Your personal assets are just as vulnerable. Applying strategies that legally protect your personal wealth is an essential part of being financially responsible.
What happens to your assets not only affects you, but it impacts the future of your children and loved ones. Contact us today and let one of our experts help you start the process of formulating a personal asset protection plan.
What Events Can Impact My Personal Assets?
There are numerous events that could put your hard-earned assets at risk. Obvious occurrences like bankruptcy or a lawsuit could damage your finances. However, there are also scenarios that most people do not realize could affect their wealth. You or your child could injure someone in a car accident or someone could be involved in an accident on your property. In these instances, you would be held liable for medical bills and, potentially, additional compensation.
How Can I Protect My Assets?
Know The Law
A simple way to assure your assets are protected is to know your local laws. If you are currently dealing with a risk to your personal wealth, it is important to avoid transferring holdings until the problem is addressed. It is against the law to move assets when you know a creditor is seeking to acquire them. It is called fraudulent transfer of assets, and it is a serious offense. The best way to know your local laws is to work with a professional personal asset protection expert. Call us today, and let’s see how we can help you.
Much like car and life insurance, personal injury insurance can protect you if someone is injured while at your residence or personal property. In many instances, the insurance company will have the opportunity to settle with the injured party, and a lawsuit can be avoided. If a lawsuit is pursued, your insurance policy will pay for damages instead of them being taken from your personal assets.
Separate Personal And Business Assets
One of the most straightforward ways to protect your personal assets is to separate them from business assets. This assures that your personal finances are not used for business accidents, judgements, or lawsuits. It is recommended you avoid using business finances to pay for personal expenses. You should also always deposit business profits into a business banking account.
Our personal wealth experts can help you figure out if this option is right for you.
The most reliable way to protect assets is through trusts. There are two types of trusts — domestic and foreign. The trustees of a Domestic Asset Protection Trust Are located within the United States, and anyone who makes a claim against your assets must do so through the trustee. There are also a large number of federal rules and regulations that make it difficult to claim assets in a trust. Foreign Asset Protection Trusts are very similar to domestic trusts, but the trustees are not located within the United States.
Family Limited Partnerships
A Family Limited Partnership, or FLP, includes a general partner, who runs the partnership, and limited partners, who have no power over the assets. A husband and wife are commonly general partners within an FLP, and children are limited partners.
In a FLP, a creditor of one partner cannot seize shared assets to satisfy a debt. In order to satisfy the debt, the creditor has to get a charging order against the partner’s part of the asset. It is unlikely that the FLP will ever make an asset distribution to the partner who is in debt, so the creditor’s claim may not be satisfied.
The Bottom Line
Protecting your personal assets is vital, and it can affect the wealth of future generations. Speaking to one of our asset protection professionals can help guide you in the right direction when it comes to protecting your hard-earned money. Let us help create a customized protection plan to help meet your goals!