Protect Your Assets Now From Tomorrow’s Lawsuits

Attorney Garrett Sutton shared ten rules for protective asset protection planning, so that your family and your business can be protected from creditors, lawsuits, judgments, and divorce. Sutton wrote that you should consider:

  1. Planning your strategy before you’re sued. It’s too late to try to protect your assets once a lawsuit is filed. But a strong protection structure can possibly deter lawsuits.
  2. Separate your personal and business assets. This is especially true for sole proprietors.
  3. It’s risky being a sole proprietor. If you own a business then you are personally sued and aren’t insulated by your business. Consider becoming an LLC, S-Corp, C-Corp, or LLP.
  4. A partnership can mean double the risk. You can be held liable for what your partner does or doesn’t do. 
  5. Protect yourself by using a registered corporate entity for asset protection. Do research on forming or converting your company into an LLC, LLP, S-Corp, or C-Corp.
  6. Maintain annual requirements so that your legal protection remains intact. That means making sure you’re holding your annual meetings and keeping minutes, keeping your company assets separate from your personal assets, and not signing business documents in your name.
  7. Protect your business and real estate assets in a business entity. Consider putting your rental and investment properties in an LLC
  8. Have a comprehensive commercial insurance policy. This can help you keep your property rather than lose it in a court-ordered settlement.
  9. Use entities as a second line of defense. Just in case your insurance doesn’t fully protect you, using entities for asset protection could possibly save you the added headache.
  10. Avoid incorporation scams, like the “We can incorporate your business for $99”.

Take the time to do your research and make sure that you do your part to protect your personal and business assets. You never know when you can be the party in a lawsuit or on the end of a creditor’s wrath.

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