Developing an Appropriate Asset Protection Strategy
Asset protection is often considered to be a tool for the ultra-rich, but anyone can benefit from it.
When most people think of asset protection strategies, they imagine extensive legal documents or opening bank accounts in far-off countries. While these are examples of asset protection, the more common types of tools used involve insurance planning, trusts, and establishing legal business entities that offer you personal protection.
Each person’s asset protection strategy will vary depending on their needs. Individuals who are starting their own company may need help selecting an entity type that suits them.
While a sole proprietorship is the most common type of business entity used by small businesses, other structures may provide better protection and tax benefits. Asset protection services can help ensure new business owners pick an appropriate legal structure.
Other asset protection strategies involve planning for retirement. These plans may require setting up trusts to ensure that assets are passed on to the appropriate beneficiaries. They may also include purchasing insurance to protect assets in the event of a lawsuit. Other types of insurance can provide better stability for later in life, such as annuities or long-term care policies.
Finally, current business owners need to establish an appropriate succession plan. Succession plans allow owners to provide for their eventual retirement. Owners may choose to pass the business on to a relative or close friend who is familiar with the operations, or they may sell it as part of a retirement strategy.
How Can Asset Protection Services Help?
Asset protection services are designed for the individual and the business owner. Working with an asset protection advisor can help you to minimize the potential of losing the assets that you have built and saved during your life.
Oftentimes, people who have extensive assets or have started a business have the most to lose. In a nation that is dominated by lawyers and lawsuits, having asset protection strategies in place can protect you from potential sue-happy people.
Asset protection services can also help you purchase insurance policies that are designed to protect you and your business should a customer or other individual be dissatisfied with your services and decide to sue.
Having a solid entity structure that protects the business owner’s personal assets — such as a corporation or LLC — can also act as another safeguard.
Trusts are normally used to hold assets and ensure that they are passed on to the appropriate individuals upon the owner’s death. In cases where there may be family issues, tax problems, or potential lawsuits, a trust can ensure that the original owner’s affairs are handled in the manner they intended them to be.
What Are the Benefits of Asset Protection Services?
Working with an asset protection advisor can provide you with several important benefits.
Shelter Your Assets
Oftentimes, business owners or high net-worth individuals are targets for lawsuits. Whether these lawsuits are fair or not, they may result in a loss of assets.
Having strategies in place to protect your personal and business property is smart. It can protect you from the potential of devastating losses of resources that you have earned throughout your career.
Plan for Business Succession
When you first start a business, you’re probably not thinking about your retirement or what will happen to it should you no longer be able to run it. However, at some point, the time will come when you need to step away. Having a plan in place for that time is paramount to ensuring that the business continues.
Business succession is often part of an owner’s retirement strategy. They may sell it and use the funds as part of their retirement.
Establish an Appropriate Entity Structure
Once you start a business, the entity structure that you choose is pretty much set in stone. If you’re not familiar with the various types of entity structures available and the benefits that they offer, you are at a significant disadvantage.
Asset protection services can help you pick the right structure for your business that provides the benefits most appropriate for your company.
Do You Need Help with Asset Protection?
At The Tax Planning Pros, we offer asset protection services that are designed to meet your needs. Contact us to learn more about our services and find out how they can benefit you.