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Asset protection resources for the real estate owner

Some frequently asked questions about asset protection.

What are the costs of asset protection?

The most inexpensive form of asset protection is simply your firm knowledge of local and federal bankruptcy and consumer protection laws and how they can protect you.

A consistent and well thought out insurance program is probably the best bet for you if you are not in a high risk (of litigation) occupation. A good blanket personal liability policy providing $1,000,000 of coverage is rarely more than a few hundred dollars a year. A business liability policy may be more expensive, depending upon your type of business, but the added protection would be more than worth it in a business litigation situation.

If you are in business, incorporating will cost you from several hundred to a few thousand dollars in setting up the legal entity. When you do incorporate, you can expect that there will be ongoing legal, banking and accounting costs that can amount to several hundred to several thousand dollars a year.

The most elaborate (and expensive) form of asset protection family and offshore trusts. They will provide you with the highest degree of asset protection, but you can expect to pay several thousand dollars a year to maintain them. It’s common sense that the larger and more complex the trusts, the more expensive the price.

What's the most popular technique used for asset protection?

A very common sense approach to asset protection is to choose to avoid risky behavior and risky environments. That includes avoiding other people engaging in risky behavior.
While this seems too simple given the elaborate asset protection techniques available, this approach can protect you in ways that the other techniques can't. If you avoid dangerous activities, situations and people, you will have very little need for elaborate schemes. If you must engage in these activities, plan to budget a substantial amount of your resources toward profession asset protection.

How does a limited liability company provide me with asset protection?

It create a legal entity to buffer you personally from liability of the LLC created. You should be aware that an LLC will only insulate you from general business liability based claims against the LLC. If there are claims against you personally, you won’t have protection just because of the existence of the LLC.

Can I set up an asset protection structure after I already run into trouble?

If you’re already in danger of litigation because of your actions or the actions of others that you may be liable for, it’s probably too late to set up an asset protection measures that will pan out in court. Transferring assets to a friend or family member will most likely be seen as a fraudulent conveyance by the courts should litigation ensue. In any case, if you are a target of creditor's collection action or a lawsuit, you should seek competent counsel for advice in defending your assets.

Do I need to hire an attorney to set my asset protection techniques?

As mentioned above there are several techniques that are common sense approaches to avoiding trouble. If you have a competent insurance broker, you will not need an attorney to purchase the appropriate coverage.

There are numerous online and storefront resources available to assist you in setting up a corporation or LLC. You might want to seek counsel for a general overview of what you are trying to accomplish.

If your circumstances require that you set up a specific trust for your assets, then it will be unlikely that you will correctly assemble the documentation without the assistance of competent legal counsel. You may actually be doing yourself more harm than good should incorrectly set up a legal entity that will not stand the scrutiny of the courts in the jurisdiction of the trust.

At assetprotection101.com, we offer the latest news developments, strategies, resources and links relating to asset protection. Whether you a real estate developer, real estate owner or any business owner looking to better educate themselves on how to protect their assets, we're sure you'll find our site helpful in making a better decision about your financial future. You may even choose to receive our free monthly newsletter to keep you on top of the latest developments in asset protection.

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