Asset Protection 101

October 14, 2024 • Estimated Reading Time: 2 minutes

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Accidents happen. Bad people exist. There exists a possibility that one or the other of these will cross your path. If/when that happens, you will be vulnerable to litigation. Without proper asset protection, everything you own could be at risk. Here are the basic steps you should take. Note number seven very well, because it will involve other important steps.

  1. Form a Legal Entity: Establish an LLC or corporation to separate personal assets from business liabilities.

  2. Get Adequate Insurance: Obtain property and liability insurance to cover potential risks.

  3. Use Proper Contracts: Ensure all agreements are in writing and legally binding to minimize misunderstandings.

  4. Maintain Accurate Records: Keep detailed financial and operational records to protect against legal issues.

  5. Separate Personal and Business Finances: Use different bank accounts and credit cards for personal and business expenses.

  6. Regularly Review Asset Protection Plan: Update your strategy as your portfolio grows or laws change.

  7. Consult with Professionals: Work with attorneys and accountants to ensure your asset protection plan is solid.