Why Is Asset Protection Important?
Business ownership can be fraught with pitfalls and risks. Making money is not enough, you must also protect your family and business from claims and lawsuits. IRS, debts, mortgages, claims for damages caused by your employees, products or professional liability are just some of the risks you must deal with.
These risks could result in the loss of personal and business assets. Minimizing your exposure to these risks by protecting your assets, will give you a chance to run your business successfully.
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Protecting Your Assets
The goal of a comprehensive asset-protection plan is to prevent or significantly reduce risk by insulating your business and personal assets from the claims of creditors.
Unfortunately, most small-business owners are unaware of all the potential risks that can harm their business and the options available to protect themselves. An asset-protection plan employs legal strategies, put in place before a lawsuit or claim arises, that can deter a potential claimant or help prevent the seizure of your assets after a judgment.
Strategies used in asset-protection planning include separate legal structures or arrangements, such as corporations, partnerships, and trusts. The structures that will work best for you depend, in large part, on the kinds of assets you own and the types of creditors most likely to pursue claims against you.