Asset protection is not just a strategy for the super-rich, but for anyone who aspires to have a brighter future than punching in and out of a clock every day. If you’re serious about acquiring even a modest amount of wealth, such as buying a rental lease property or two, here are some basic tips for asset protection that simply can’t do without.
Tip 1: Invest in Your Own Business
Whatever your business is, from selling widgets online to buying and managing rental lease properties, there are countless tax advantages to starting and running your own business. Every time an expense related to your work pops up, guess what? You won’t pay taxes on that money.
Tip 2: Use LLCs
A limited liability company, or LLC, is a very useful tool for preventing litigators from reaching their greedy fingers into your pockets. They’re easy to set up yourself, but do yourself a favor and hire an asset protection specialist to structure them properly, so that ambulance chasers can’t find or reach your assets.
Tip 3: Segregate Your Assets
While we’re on the subject of LLCs, it’s critical that your assets are all separated and owned by different companies, so that a breach of one doesn’t sink your entire ship. For example, own your rental lease properties under different companies, have a different company handle their property management, have a different company sell your widgets, etc.
Tip 4: Insure against Liability
Insurance is a tricky issue, because insurers will do everything they can to avoid actually paying you when you need them. Still, find an insurance agent who you can actually trust to look after your best interests, and ask for their advice about liability coverage that will actually protect you from the most likely sources of litigation.
Tip 5: Diversify your Protection
Geo-arbitrage is the practice of holding multiple asset-holding accounts in various countries around the world, in the event you need to transfer assets somewhere outside one jurisdiction.
Tip 6: Hire Good Advisors
You don’t know everything. For example, chances are you don’t know every rental lease property tax loophole that exists for S-Corps in the state of Florida – but someone does. Hire a great accountant to handle your taxes, along with the best asset protection advisors, and of course, hire the best employees you can find to help you run your businesses.
Tip 7: Prevention is Necessary, Not Just Advised
Once you’ve been served with a lawsuit, it is literally too late to protect your assets, or at least it will cost you many times as much to implement, because by that point you are effectively guilty of fraud if you try to hide your assets. Do it while you’re able, which is to say do it right now.
The United States is the most litigious society in the world, and if you’re an aggressive investor and businessperson, you will be sued sooner or later by someone looking to make an easy buck at your expense. Protect yourself now, and those rental lease properties will still be generating income for you for decades to come.
You can find more tips and resources from Kevin Kiene at his online hub for landlords: http://www.ezLandlordForms.com. You can create custom, state-specific rental agreement forms, read up on landlording in their online database of landlord articles, and print many free rental forms.
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