There’s nothing like the satisfaction of working hard and earning your keep. But while it’s okay to bask in that sense of accomplishment from time to time, you shouldn’t forget the extra work it takes to keep your assets in check.
Potential success always comes at the risk of failure. The odds may typically sway in your favor, but it only takes one bad day to lose everything. Should the worst happen, Cantley Dietrich notes that proper asset protection could save you.
It may seem daunting at first, but safeguarding your assets isn’t impossible. Once you wrap your head around the technicalities, you’ll find a surprising number of life-saving options at your disposal. With the right preparation, you can rest easy knowing that your life’s work is secure.
What you have and where it should go
With all this talk of keeping your assets safe, it may shock you to find that the best way to guard them is by not having them under your name. Yes, you read that right. You can actually insulate your personal assets by transferring ownership to a protected entity.
Working through a Limited Liability Company (LLC) or Limited Partnership means you only lose the assets registered to that company. Everything else is safe. Creditors won’t be able to go after your house or car since these are assets you personally own.
Some states allow you to protect your assets with financial planning exemptions. Florida, for example, prevents creditors from claiming homesteads or retirement accounts. Don’t forget to check your local laws. You might find something helpful.
Liens are another great way to secure your property. You can use them to strip your assets of equity. Without equity, creditors won’t be compelled to pursue an asset. Lien protection can take the form of either a mortgage or a credit line.
Going the extra mile
Protected entities do a great job of insulating your assets. However, you can add an extra level of protection by distributing them to several other entities. Say, for example, you have a music venue. A business like this typically has teams for management, backline, security, bar, and maintenance.
If patrons get injured at a show, their insurance providers may liquidate your assets if you can’t afford to pay upfront. Splitting your assets between separate LLCs should protect them from potential claims. Charges against management, for example, can’t be used to liquidate your backline.
Since we’re already going the extra mile, your options aren’t limited to the continental United States. The use of international asset protection is a clever method that allows you to register assets to a protected foreign entity. Since these entities are outside of U.S. jurisdiction, local rulings are invalid. You don’t even have to disclose which assets you own. With easy flee provisions and the need for re-litigation, less than 1% even bother to challenge a foreign trust.
It only takes a little extra effort to ensure the safety of your hard-earned assets. Make sure they’re safe at all times from the uncertainties of life. You can’t put a price on your peace of mind.