When it comes to asset protection, there are some pitfalls that many people fall into since they may not be intuitive. Here are some examples of asset protection missteps that many people take, including steps you can take to make sure your asset protection strategy is optimal.
Not Having a Plan
If you have a substantial amount of assets, then you absolutely need a plan to protect them. Those without assets don't get their assets targeted of course, but those who do always will. The more assets you have, the greater the urgency to have a plan. Not having a plan in this circumstance isn't really a viable option.
Underfunding Liability Insurance
This should be a priority whenever possible. In fact, many experts consider this to be your first line of defense. It's often a wise idea to contact your insurance broker to make your liability limits higher than they are now if you are increasing your assets substantially. You need to have a limit consummate with your assets. And you need to extend the limit as soon as your assets go up. Those who wait often regret it. The extension is often not going to cost too much, and if the amounts are in the millions, it's dangerous to not have enough liability in case you get hit at the wrong time.
In the case where you make a lot of your assets from renters, you need to make sure you have the right protection from them. This often means creating a corporation or other entity in order to give yourself some protection for your other assets if something should happen. That way, the worst case scenario just means that the entity gets folded up, but your other assets still remain completely safe.
It actually helps to have a different entity for each property in order to properly organize them and properly protect yourself. Again, this should be done sooner rather than later.
Failing to Maximize Entity Protection
You can actually create business entities in a wide number of situations. This doesn't have to mean only for those who have huge companies and assets in the millions either. If you're just working on your own, then you are liable for all of your personal assets if someone tries to sue your company since it's just you. In this case, creating an entity makes good sense in order to protect your more personal assets.
For more information, contact companies like Family Focus Financial Group.Share
14 September 2016
My name is Alison, and I recently found out that I should have been saving for retirement since I first began working. I have now discovered what it takes to have a successful retirement plan, and I felt secure in my ability to care for myself once I am done working. I may even be able to retire early! I'd like to help you get your retirement plans in order and make the most out of the time you will have when you are no longer working. Let me help you understand what you need in a retirement plan and how you can get started.