The Most Common Myths
If you're lucky enough to own a business, it is essential that you take steps to protect your professional assets, but also your personal ones. Without a family home trust in place, for example, business creditors seeking repayment of debt could come after your personal assets, and specifically your home. When it comes to owning, and operating a business, there are plenty of common myths about the separation of personal and professional spheres. Here are a few things you need to know to protect your assets with a business.
Business and Personal Assets are Separate
This is true, but not necessarily from a legal stance. If a business in your name is sued, your personal assets are fair game for collections or settlements. There are two good ways to go about legally separating your personal assets and engaging in appropriate asset protection. First, set up a Limited Liability Company LLC or some other type of corporate entity separate from yourself under which to conduct business. From there, make sure you don't mix your business and personal assets. Second, create family trusts for your personal assets. These assets will be available for your use for as long as you specify (for the duration of your life, for example). They will be held in a trust structure for your named beneficiary. Doing so places them beyond the reach of business creditors.
My Business Partners and I are Separate
If you don't have proper protections in place, this might not be the case. Suppose there is a lawsuit against your business partner. It's possible that the business and its assets could come under attack. Even if your business is incorporated, the whole business could be put at risk, not just the portion your partner owns. For this reason, anyone allowed ownership in the business has to be willing to put proper protective measures in place. Additionally, you may want to set up business trusts.
My Business and Estate Plans Don't Affect Each Other
Again, you can certainly take this stance. However, it may end up being to the detriment of your business. That's because it may not be adequately protected if you pass away. Perhaps you want your business to continue operating after your death. In that case, your business plan and your estate plan need to work together, to an extent. That is especially so if you plan to pass on any portion of company ownership to a successor.
So why not learn more and register with TrustUs today.
After all, it's in your hands.