With the ever-growing trend in America of identity theft and frivolous lawsuits, it’s crucial that you shield your business and personal assets separately. NCH can give you and your business the security to thrive.
What Is Asset Protection?
Asset protection is the process of safeguarding a person or business entity’s assets from potential risks. It involves structuring assets to make them difficult or impossible for others to seize or access. Some of the common asset protection tools include trusts, limited liability companies (LLCs), and insurance policies, among others.
The goal of asset protection is to shield one’s wealth and property from any unforeseen circ*mstances that may lead to financial loss. Remember that asset protection should not be used to evade taxes or engage in illegal activities.
The Importance of Asset Protection
Over time, we accumulate assets that we work hard to acquire. These assets can be anything from properties, investments, businesses, and bank accounts, to personal property. As valuable as these assets are, they are also vulnerable to various risks such as lawsuits, creditors, divorce, bankruptcy, and even natural disasters.
Securing an asset protection trust is not just a concern for the wealthy or high-net-worth individuals but is equally important for everyone who has assets to protect and wants to ensure financial stability, including limited and general partnerships, corporations, and LLCs.
The Reality of Lawsuits
Most small businesses know that incorporating can shield personal assets in the event of a frivolous lawsuit, but many are lulled into complacency by an “it-won’t-happen-to-me” attitude. This thinking has resulted in tremendous losses to countless business owners.
The popular benefit of incorporating is having a separate legal entity, wherein personal assets are detached from business assets by establishing a corporate veil. The corporate veil prevents lawsuits and other adverse actions against a business from targeting the business owner's personal assets.
There has never been a case where the corporate veil has been pierced on legal entities in Nevada.
The Risk of Litigation
It’s a sad reality, but you will likely held personally liable and face a lawsuit if you’re engaged in any business activity. The costs of defense can easily reach over $100,000. Everything you’ve worked hard to create will be placed in jeopardy.
Common Lawsuits Faced by Business Owners
- Employment Lawsuits: age, racial, gender, pregnancy, disability, mental illness, and addiction discrimination, as well as sexual harassment, peer harassment, wrongful termination, employee injury, etc.
- Professional Malpractice: medical, legal, psychological, engineering, architectural, accounting, etc.
- Business Liability Lawsuits: environmental cleanup, dissatisfied customers, personal injury, shareholder liability, etc.
- Personal Liability and Lawsuits: divorce, business partners, creditor claims, accidental injury caused by a family member, personal injury, etc.
The sad truth is that when you’re perceived to have assets worth plundering, you’re more likely to be targeted for that reason rather than your degree of fault.
It used to be that only big corporations, banks, insurance institutions, and household names were targeted for lawsuits, but that’s no longer the case. New targets for litigants are those who have saved for retirement, own a home or rental property, and are sole proprietors at risk of business debts. It’s estimated that over 30 million people in the United States have mutual funds, savings, or own equity in their homes.
The worst part is that millions of practicing lawyers and countless others graduating from law school are looking for cases that can earn them money. Every day in court, a plaintiff prevails against a so-called “wealthy” defendant – even in cases that appear illogical, irrational, and totally devoid of merit.
Who Are the Prime Candidates for Lawsuits?
- Property Owners
- Business Owners
- Officers/Directors of Publicly Traded Companies
- Sole Proprietors
- Real Estate Investors
If you fall into any of these categories or have a retirement nest egg, you must remove any incentive for people to sue you right now!
The key is to ensure that plaintiffs and their lawyers can’t get their hands on your money because they won’t waste time and money trying.
Mitigating the Risk
Thankfully, there are various ways to transfer ownership of assets to shelter them for protection. The following is list of the devices and entities that can be used for estate and asset protection planning:
- Living Trusts
- Limited Partnerships
- Corporations & LLCs
- Family Security Trusts
- Real Estate Privacy Trusts
- Life Insurance Trusts
Protecting your assets encompasses more than just safeguarding them from lawsuits. You want to strive to protect your foundation for generations to come. Proper asset protection strategies are critical to a secure, well-protected future for you, your business, and your family.
Start Planning for Asset Protection
If you’re the victim of identity theft, it can take upwards of a month before a major bank can investigate the claim and refund the stolen dollars back into your account. That’s why corporate and asset protection for business owners is an absolute necessity. It lowers your asset profile, and keeping confidential information safely out of criminals’ reach is paramount.
At NCH, we are committed to providing a wide range of asset protection services to help safeguard your assets and personal information. Our team of experts can help you incorporate your business, establish a trust, and form an LLC.
Don’t wait until it’s too late to protect your assets.
Got a Question? Start Here
The best asset protection combines legal structures like trusts and LLCs, proper insurance coverage, and financial strategies to shield assets from creditors, lawsuits, and other risks.
Asset protection aims to safeguard personal and business assets from potential claims, minimize legal risks, preserve wealth, and ensure financial stability for future generations. It helps maintain control over assets and limits exposure to liabilities.
Asset protection focuses on legal and financial strategies to shield assets from claims and risks. At the same time, security involves physical and cybersecurity measures to protect assets from theft, damage, or unauthorized access.
Risk management protects assets by identifying potential risks, implementing mitigation strategies, and securing appropriate insurance coverage. Regularly review and update your risk management plan to address new threats and changes in your financial situation.
Discover how Asset-Protection Trusts (APTs) can safeguard your wealth from creditors while allowing you to maintain some control over your assets. These trusts offer unique benefits for effective estate planning and financial security.
Curious to learn more? Read the full article for comprehensive insights!
Lawsuits can arise unpredictably, making asset protection crucial for anyone with valuable assets. From real estate to investments, safeguarding your wealth is a vital aspect of financial planning. Discover effective strategies to defend your assets.
Read more about protecting your wealth on our dedicated page!
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Contact NCH today to ask about our asset protection strategies at 1-800-508-1729 and get your FREE consultation today!
Book Your FREE 1:1 Business Checkup
In only 15-30 minutes, our business formation experts will meet with you and:
- Evaluate your current business structure and identify areas of improvement
- Find potential problems before they become major issues
- Develop a game plan for improving asset protection and minimizing tax liability
- Reduce your exposure in the event of a business accident
Time slots are limited and fill quickly, so secure your spot now!
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