At this day and age, it’s only prudent to guard your wealth, especially if you’re the primary income-earner in your family. After all, you did work hard for your money, so you should do all that you can to make sure that the rightful beneficiaries can enjoy a comfortable life even after your passing.
A lot of people think that this process is solely for rich conglomerates and billionaires. However, asset protection is valuable for everyone, even if you only have one home under your name. You still want to ensure that it will be inherited by your family when the time comes.
Here are the reasons why you should consider doing asset protection:
- Safeguard Your Wealth From Legal Threats
Business owners and medical practitioners are highly vulnerable to malicious and wrongful claims by their customers and patients, respectively. If you fall under one of these categories, you should consider asset protection to ensure that the court won’t have the legal right to seize your properties due to the lawsuit filed against you.
One of the best asset protection strategies for this scenario is an offshore trust. With this, you and your lawyer can set up limited liability entities and bank accounts in a foreign country.
It’s an excellent way to ensure that people with malicious intent against you won’t be able to grab ahold of your wealth. This is because they would need to hire lawyers and take their case to the local court, which would end up being a lot of trouble on their end. Learn more about offshore asset protection trusts here: www.milehighestateplanning.com/offshore-asset-protection.
- Separate Personal And Business Finances
In connection with the previous item, an asset protection lawyer can help you separate your personal and business finances. You must draw the line between the two to avoid problems in the future.
For instance, you don’t want to use only one bank account for both your personal and business income since it would make accounting difficult for your enterprise. Having the assistance of a specialist attorney would make the process more understandable.
These are the factors you should be mindful of separating for personal and business use:
- Checking Accounts – You should have separate checking accounts for your business and personal finances. This is a fundamental practice for differentiating your incomes and expenses.
- Credit Cards – You should also apply for a separate business line. With this, you won’t have to worry about corporate debt affecting your personal credit score.
- Receipts – Keep two folders or boxes for two categories of receipts. Your future self and accountant will thank you profusely when tax season comes.
- Salary – You can make sure that you stay within both your personal and business budgets by giving yourself a salary. The fixed amount makes it easier for you to account for the expense in the enterprise’s end and personal income.
- Shared Items – Your car and home offices are considered to be shared by your personal and business lives. You can split the expenses for gas and electricity, respectively, between your company and personal budget.
- Take Care Of Your Family
Another primary reason why you should get asset protection is to ensure that your family, the rightful beneficiaries of your wealth, can enjoy the money you’ve set aside for them. While it may be depressing or gloomy to think about your demise, it’s a wise move to prepare for the inevitable since it’s a constant thing in this world, along with taxes.
- Ensure Business Continuity
At the start of your company, you may have followed a legal checklist to ensure that you comply with the government’s requirements. Still, you should also consider the future of your enterprise. This is where asset protection comes in since it can promote business continuity.
Your lawyer can help you mitigate the risks for incapacity and death, which reduces or removes your ability to manage your properties and business. When you have an asset protection plan in place, you won’t have to worry about the status of your company even when you become unable to continue running it.
Asset protection is a valuable tool for everyone who has investments and properties. It allows you to safeguard your wealth against malicious lawsuits. Your lawyer can also help you separate your personal and business finances.
Moreover, this financial strategy allows you to take care of your family and ensure that the rightful beneficiaries enjoy their inheritance. Plus, it promotes business continuity since you can assign an executor to continue running your company on your behalf in case of incapacity or death.
Raymond King has been blogging for more than ten years. Raymond is fond of writing articles on business, health and wellness, and home improvement.