If you’re a business owner or in charge of one, you know it can be a full-time job to keep your assets safe from litigation. By protecting your assets, you can take time away from running your company and focus on growing your business. This article will discuss 5 ways to protect yourself from litigation and keep your business strong!
Top 5 Ways to Protect your Assets from Litigation
1. Set Up a Separate Legal Entity
A separate legal entity is a company that you do not own. It can be set up to protect your assets and business from litigation and liability for employees, contractors, and vendors. The main benefit of having a separate legal entity is that it allows you to do things like:
- Creating an independent bank account for your company.
- Setting up a separate treasury department with its budget.
- Hiring lawyers who specialize in different areas of law (such as employment law or real estate law);
2. Maintain Good Records
Keep a log of all transactions. This includes the money that changes hands and any expenses related to your business, such as travel or office supplies.
Keep a calendar of all meetings and events held at your office or home that involve you, your family members, and other people involved with the company—this will help you better understand how much time you spend on the business versus personal activities. Make sure there are no duplicate bills for services rendered by vendors who work on behalf of your firm and yourself personally; this could lead them into thinking they were paying twice for one thing!
3. Protect Business Assets
If you’re a commercial business owner, it’s important to protect your assets from litigation. You can do this by forming a separate legal entity (keeping good records of your business transactions) and ensuring that your assets are safe from lawsuits. This can be especially useful if you’re running a company that deals with sensitive information, like financial records or medical information. Additionally, keeping an eye out for fraud and theft within the company is important.
4. Don’t Commingle Personal And Business Funds
It is important not to commingle personal and business funds. If you do, it could result in a legal problem. For example, if you are using your business funds to pay for personal expenses like vacations or gifts for your family members. Then this could be considered an improper use of the money by the IRS and cause them to come after you for back taxes on those monies and penalties for late payment.
5. Use Retirement Accounts
You may consider using a retirement account if you’re trying to protect your assets from litigation. These accounts—like IRAs and 401(k) s—are exempt from creditors and can be used for asset protection. You can also use a trust fund or life insurance policy as an additional layer of protection against the threat of lawsuits in case something goes wrong with your estate plan.
The many years of experience ALTA Estate Services have in preparing estate and living trust documents is one of their strengths.
Based on the most recent estate planning laws, ALTA Estate Services not only drafts the most up-to-date and comprehensive living trusts, wills, medical power of attorneys, and estate documents but also helps its clients and family members administer living trusts and medical power of attorneys in times of medical emergency. There’s a lot more you can do, and if you have any questions, please don’t hesitate to contact us.
Feel free to call the ALTA Estate Services, LLC office at (520) 797-1400 to learn more about proper and complete estate planning, including the Emergency Telephone Hotline Program afforded to you and your family members at no charge during times of crisis and the other benefits of estate planning described above. Mark Fishbein, Tucson, AZ.
The text above is for general informational purposes only and should not be considered legal advice. For more information, click Contact Us.