Asset protection has been practiced over the years. The methods involved are advancing in better ways minimizing the risk of loss after a lifetime of hard work. Some assets typically covered are cars, machinery, intellectual property, and real estate properties. With the level of economic development and technological upgrades in the APAC region, demand for asset protection has also been on the rise. For instance, a recent report showed that Singapore continues to lead the region in IP rights protection to support the growth of businesses in the country.
Do you want to protect your business or personal assets but have no idea how to go about it? Here are the essential things you should know and do to protect them.
1. List Down All Your Assets
You can’t protect assets that you don’t know. Writing them down will give you a better picture of how much you own and help you to determine what needs priority and protection. However big or small, carefully write them down and identify the value of each asset.
2. Contact a Lawyer
Seek the services of an experienced lawyer, preferably an asset protection lawyer. There are many law firms with official websites such as https://blakeharrislaw.com/ that show you the services they offer and can guide you on the best course of action.
Doing this legally and with an expert may prevent potential issues of fraudulence and illegal holding of assets for foreign investments. Lawyers can also help safeguard important documents and receipts.
3. Perform a Risk Assessment of Each Asset
The list of assets will come in handy at this stage. Together with your lawyer, assess the liabilities and risks involved for each asset. Doing so will also guide them craft better protection plans and determine how to best distribute them vis-a-vis your goals.
4. Look At Available Asset Protection Options
Some of the most common options are asset protection trusts and commercial umbrella insurance policies.
Asset Protection Trust
An asset protection trust allows you to transfer your assets to an independent third party, known as a trustee. The assets in this trust are ‘owned’ by the trustee. An asset protection trust aims at breaking a direct connection between your business, including its assets. In case of a lawsuit or creditors going after your business’s assets for recovery, they can’t seize these assets since they don’t belong to your business. These assets belong to the trustee. You have the option of using a domestic or international asset protection trust.
Commercial Umbrella Insurance Policy
A commercial umbrella insurance policy adds an extra layer of liability protection by covering expenses that exceed the limits of your regular insurance. This type of asset protection may prevent you from involving other assets not related to the lawsuit or creditor claim.
5. Separate Your Business And Personal Assets
Keeping your personal and business assets separated protects one from the other in case of a lawsuit. Protect your personal assets in trusts such as asset protection trusts and your business assets under business entities.
When running a business, have all documents and transactions under the business name and not your name. This way, assets not related to the business cannot be confiscated in case of a legal dispute.
6. Diversify Your Assets
Distribute your assets under different entities and have each of them protected under separate asset protection plans. Instead of putting your eggs in one basket, diversification prevents all assets from being easily seized by creditors in one go. You may also broaden your options through foreign investments.
7. Choose the Right Business Entity to Operate
If you decide to get into a business, choose a business type that protects your personal assets. Business entities, such as LLCs or limited liability partnerships tend to separate business assets from personal assets. Such entities also allow you to formulate the company’s policies regarding assets and who’s to be held liable under various circumstances.
When naming your business, it would also be a good idea to consult a trademark lawyer. This is to ensure that the business name is unique and naming issues are also prevented in the future.
8. Periodically Review Asset Protection Plans
As years go by, assets depreciate and appreciate. Thus, it is advisable to review your asset protection plans with your lawyer to keep them updated and appropriately covered as they mature.
Asset protection is one of the options you may want to consider to safeguard your future and that of your family. Your years of hard work and sacrifices will not go to waste if the asset protection plans and policies are curated based on your needs and aligned with your goals. As this is only an additional form of protection, insurance must still not be replaced.