Think of the time and toil it took for you to get your business off the ground, factoring in the investment of time and finances you have made. Running your own business is a risky venture, and it gets even riskier if you don’t have an asset protection plan in place to safeguard your investment and protect you from losing your ability to operate or start over should a serious financial threat arise.
Here are three things you can do to protect your assets:
1. Consider your potential liabilities.
There are many things that can whittle away at your assets—government taxes, contract issues, health issues, and debts such as unpaid taxes, child support, and loans are all potential liabilities. You should also be cognizant of auto accidents, professional malpractice, homeowner and office accidents, and rental property accidents because these can also endanger your earnings.
Pro Tip: Don’t forget that you can be held responsible for the actions of your partners, employees, and family members. Make sure you are always in the loop by getting regular feedback, setting up a reporting schedule and communicating regularly not only by email and phone but through face-to-face meetings.
2. Make a plan.
Speak with a qualified financial planner or an attorney with estate planning expertise. Each business owner’s situation is different, and a professional will have the expertise to guide you to the solutions that are right for your specific needs. For example, traditional estate planning forms can be used as asset protection techniques. Retirement and pension plans also have a measure of protection under government law
Pro Tip: You may benefit from incorporating your business or forming a Limited Liability Company (LLC), Family Limited Partnership (FLP), or limited partnership.
3. Place your business and personal finances under a protective umbrella.
Most small businesses, unlike their larger counterparts, do not take the time to safeguard their investment and protect their earnings. It is possible to protect most or all of your personal and business assets legally, even in the worst circumstances. You owe it to yourself, your family, and your employees to do so.
Pro Tip: Make sure your insurance is up-to-date and that you have the services and advice of a trusted attorney.
Protect your assets after a challenge arises, and you may be skirting a fraud charge. Isn’t it time you think about legally protecting your assets—before a problem arises?
Johnson & Wales University offers an online BSBA – Entrepreneurship degree. For more information, complete the “Request Info” form on this page or call 855-JWU-1881.