Asset protection should be an essential factor for property owners to ensure protection against future lawsuits or claims. It is only understandable for you to take steps in having this coverage because you have worked hard to have such properties. You have already invested money, time, and effort into it. Fortunately, there are tried-and-tested, affordable strategies that you can implement to protect your assets.
In London, you can ask for help from solicitor firms to handle personal asset protection. Here are a few things to consider.
Pick Out the Right Corporate Entity
Operating as a sole proprietor is not an ideal business entity if you want solid asset protection. A sole proprietorship will only expose your business and your assets to potential lawsuits. Limited liability company (LLC) or S corporations may involve multiple tax-planning, but it will provide better protection of your business and assets.
Always Implement Proper Procedures and Contracts
Creditors often attack a business or pierce through a corporate shroud when you conduct business negligently or take fraudulent steps. You can avoid getting tangled in these by sticking to proper lease agreements about rentals, using the company name in the property and equipment tiles, and avoiding under the table work. Connect with insured, licensed, or bonded professionals to work for your business. Consider having asset protection specialists, tax advisors, contractors, and a legal team from solicitor firms in London.
Utilise Your Corporate Entity
If your business has set up a business entity, make sure to utilise it in the operations of your business. You have to keep a separate account for the business, use its name for all documentation, and maintain a record of all its corporate processes, including minutes of the meeting. All companies, including LLCs, are required to conduct annual maintenance of its business processes.
Have an Appropriate Insurance for Your Business
Business insurance should form part of your start-up budget. When you start operating with the coverage of insurance, you become more capable of handling incidents in your company. More importantly, you need to choose the right kind of insurance policy for your business. There are different types of coverage for different types of business and assets.
Consider Having an Umbrella Insurance
Many companies take advantage of insurance functioning as an “umbrella” over various other types of insurance that have personally or for your business. As with any different kind of insurance, umbrella coverage will not protect you against criminal, fraudulent or reckless actions.
Homestead Exemptions
A homestead exemption is probably one of the most effective protection that is given for a personal residence. You get a statutory exemption that places a specific amount of coverage for your home against creditors and bankruptcy. Every state has policies for this, and if applicable, you can use this for your assets.
There are many other options that you can explore to help protect your assets from potential lawsuits and claims. If you run a business, make sure not to mix up your personal and corporate accounts. Always utilise the business entity for all processes so that there will be no complications in the future.
More so, apply simple statutory strategies such as tenacity by the entirety and homestead exemptions to keep your property safe from creditors and liquidations.