There are numerous techniques used in asset protection.
Asset protection strategies can be put into three broad categories;
insurance based asset protection, liability limitation asset protection
and wealth segregation asset protection. In many cases the three would
be used in conjunction, depending upon your personal circumstance and
the easiest and most effective forms of asset protection, insurance
would normally pay for up to a specified amount of money to or for you
should an unexpected event occur. Any number of events could occur,
including serious illness, damage to someone else’s property or person
or a being the victim of a natural disaster. With respect to liability,
insurance might cover the actions of you, a family member or employees
action that results in someone being injured or property being damaged.
The policy in place will allow the insurer to pay for the economic and
non-economic damages that you or another person suffers, thereby
protecting your assets!
On top of your home, automobile or business policy, many choose to take
out a general liability umbrella policy to add extra protection that the
basic policies may not cover. A $1,000,000 personal liability umbrella
for an individual might cost only $200 to $300 annually.
Limited liability entities.
Businesses and investors often use limited liability companies and
corporations as a form of asset protection. With the use of these
entities, an unexpected tragedy or accident would protect the owner and
shareholders property. The liability in this case would be limited to
the assets of the entity, requiring the liquidation of the entity but
not all of the assets of the parties involved. Without the protection of
the limited liability entity, the business owner’s or real estate
investor’s worst case scenario could be that they could lose almost
everything they own..
In general a limited liability entity provides all the same asset
protection as a corporation without a lot of the hassles and paperwork.
A corporate entity might require stockholder meetings, a board of
directors and of course records, records, and more records. A limited
liability company would not.
Many times, a person might utilize asset protection by putting large
portions of one’s assets outside the reach of creditors trying to
collect or litigants trying to sue.
Current laws protect quite a bit of personal assets, such as homestead
protection, personal assets and retirement accounts. Wealth segregation
methods take it one step further. Many individuals can contribute assets
to a trust for specific uses. The principal of the trust is often beyond
the reach of creditors or plaintiffs. When one uses a trust for asset
protection, they will often choose a state or country that has favorable
treatment for the creators and beneficiaries of the trust but not to
creditors. All of these strategies are useful in protection of the
assets that you have accumulated. Utilize the resources of this site to
determine which option will work best for your personal circumstances.
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relating to asset protection. Whether you a real
estate developer, real estate
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