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Protecting your assets is very important especially when these assets are of high value to you. This is because there are so many unpredictable risks to your assets.
These risks might involve divorce, creditor claims, and liability lawsuits, among others. Therefore, one of the ways to be on the safe side protecting your assets as soon as possible.
But in case a lawsuit is filed already, then you should read this article to the end. It discusses asset protection after a lawsuit filed.
Why You Should Protect Your Assets
If you are a wealthy person, you should take asset protection real seriously because society is filled with greedy people.
So in order not to be a victim, you should protect your asset using the tips that would be discussed today.
Another reason why you should protect your asset is to keep the same for your generations. So that they don’t have to go through unnecessary stress after inheritance.
Protection of Assets Using Offshore Asset Protection
There are many methods for asset protection, such as offshore trusts and foundations, but one of the best ways to protect your assets is by incorporating a company in an offshore jurisdiction.
Offshore asset and wealth protection is an effective and legal way to protect personal assets and wealth from creditor claims, frivolous lawsuits, business failure, and separation.
This is done by taking individual assets out of the country of origin and transferring them to an offshore jurisdiction.
If the assets are at risk, the assets must be pursued through the legal system of the jurisdiction.
Since pursuing these assets takes a long and tedious process, a lawsuit can end at that point.
However, if they are taken to court, the statute of limitations is two years, during that case, it must be started and ended, or it is abandoned.
Offshore asset and wealth protection is an effective and legal way to protect personal assets and wealth from creditor claims, frivolous lawsuits, business failure, and separation.
Other Strategies to Protect Assets from Lawsuits
Financial planners can use many methods to help clients protect their assets from levies by creditors and lawsuits.
The use of partnerships, FLPs, limited liability companies, and trusts can all provide substantial protection from litigation.
However, proper planning is required to ensure that customer assets are truly protected – simply creating these entities may not be sufficient in some cases.
Here are some strategies that can help you protect your assets from repossession if you find yourself in court.
Forms of Ownership
Several different legal entities can be used to own your assets. Some of them are independent taxpayers, while others function as pass-through structures.
A list of common forms of ownership includes;
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Limited partnership
This is a joint business model with at least two partners. One or more partners function as the general partners who manage the association.
The other partners are limited partners, whose liabilities are limited to the amount they invest in the partnership.
Also, the partners are not personally liable for the debts of the company.
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Family Limited Partnership (FLP)
This is a form of ownership that allows members of a family to pool assets or a business in a single partnership in which each of the family members owns their share of the partnership.
These entities are often used to reduce property taxes that may be incurred when assets are passed from one family member to another because the assets within them are listed at reduced valuations.
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Limited Liability Company (LLC)
This entity is essentially a hybrid between a limited partnership and a corporation. The owners are protected from the liabilities of the business, with a corporation, but the income generated by the business passes through the owners as a partnership.
Tips that Can Help You Protect Your Assets from Lawsuit
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Separation of property
Avoid letting business responsibilities affect your spouse. If assets in the name of relatives are included, in case of divorce, it leaves you defenseless to claim.
However, if the transfer is carried out before incurring debts, a non-fraudulent intention could be defended, although there is a risk of asset uprising.
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Mercantile Registry
Register in the Mercantile Registry, the matrimonial property regime, and if the spouse is willing or not to support the business activity with their assets.
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Share undivided assets
Make hardship to liens legally. In this case, share 50% of the ownership of the goods with your partner. It is attachable, but its realization is more complicated for creditors. It will be easier to negotiate with them.
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Not being a guarantor
As an alternative to the personal guarantee, offer a property to the bank, company shares or limit the guarantee of the loan to a percentage of the loan, so that after the amortization time of the guaranteed amount, it is canceled.
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Separate business activities with different levels of risk
This will prevent the company that most exhibits due to its commercial activity from damaging the normal functioning of a company dedicated to activity without risk exposure.
Asset Protection after Lawsuit Filed
After a lawsuit has been filed, the did have been done. Therefore, you are left with no other option than to face it squarely.
So, ensure that you protect your assets from lawsuits as soon as possible. All you have to do is to take action immediately.
Related Post: How to Store Money without a Bank
Conclusion: Asset Protection After Lawsuit Filed
Protecting your assets from lawsuits and creditors should be a vital component of your financial plan. Wills, trusts, partnerships, and limited liability companies can be used to provide you with an effective estate planning and litigation strategy.
The right estate plan for you will depend on your current circumstances and goals, but incorporating the use of a trust in conjunction with a business entity in some form is often necessary to provide optimal asset protection.
Ensure that you share this article with your colleagues online who might also be interested to know more about asset protection after a lawsuit filed.
Meanwhile, if you are aware of any other asset protection strategy, you can let us know in the comment section. Thanks
