You’ve worked hard for your home, autos and furnishings, or perhaps you’ve received an inheritance and now it is all being threatened by litigation, bankruptcy or government seizure. You need to know about asset protection.
What Does Liability Insurance Cover?
One of the ways to protect yourself and your assets is to have liability insurance. Rates are a reasonable $200 – $300 per 1 million in coverage per year. To cover a $5 million policy will set you back about $1,500 a year. Just inherited a million dollars? Get enough coverage to protect your new net worth. Many of us with a home, vehicles and furnishing are not aware that we approach a million dollar net worth. Two cars about $45,000 to $50,000 total for even economy models, homes valued at $200,000 and personal property at about $25,000 – $50,000 and we find ourselves with net worth approaching a half million dollars, for most middle age earners. Just to be safe consider an umbrella policy of $1 million should be considered.
Should Married Couples Have Separate Bank Accounts?
Separate accounts. Many find divorce a surprise. Children from a previous marriage may find their inheritance diluted by comingling funds. Put your windfall into a separated account. Another facet of joint accounts is individual liability. A tax lien, lawsuit judgment can wipe out an entire account. Individual accounts with a joint account to run the home or divide the bills between family members is a good idea.
How to Protect Personal Assets from Business Lawsuits
Own multiple properties, managed under a sole proprietorship you may want to reorganize and place your properties in a LLC or corporation, shielding your personal assets from disgruntled renters. In Nevada you can organize a series LLC that protects each individual property under a single entity. If you have a small business organized as a partnership, similar to joint accounts, you may find your assets at risk due to the actions of your partner(s) which places all of your personal and business assets at risk. Organize a formal business entity, either corporate or LLC. Sole proprietorship as mentioned earlier places your entire estate at risk if sued. Formal business organizations were created for a purpose.
Asset Protection Strategies
The whole goal is to take legal steps to bar the attractiveness of personal assets and the steps necessary to deprive you of them. Asset protection comes down to balance, sometime delicate, of your control and access versus a sufficient lack of control recognized by the courts to your loss. An asset protection comes with its own attendant myths, misconceptions and misunderstandings. First asset protection requires consideration regardless of your net worth, it isn’t for the only the ultra rich, it can protect your assets regardless of income or assets you may have. Another misconception is that your control of your property, real or personal is jeopardized. It would not be appropriate to lose control over assets and not be able to enjoy them in an attempt to preserve them, it’s not realistic. Asset protection will neither provide tax advantages nor initiate an IRS audit. Properly formed the IRS recognizes a properly implemented protection for what it is. Not a lawsuit target, though we all are subject to spurious suits and possible judgments. Corporate or a Family Limited Partnership will provide insufficient protection against an aggressive, knowledgeable and determined opponent.
Asset Protection Attorneys in Las Vegas, Nevada
Frivolous or merit-less lawsuits can be avoided with a legally organized asset protection plan. But it is better to be proactive; initiating a protection after litigation has been triggered offers less successful protection than a plan set up before the court action. So consider action sooner than later. Initiate an asset protection plan and organize your assets before the axe falls, it may save your neck. Contact Kajioka & Associates today!