Do you know these 6 asset protection tips? If not, you could lose everything you own when faced with a lawsuit.
You can increase your chances of business success if you follow the lead of proven business leaders such as Donald Trump. How does Donald Trump structure his business? How does he protect his assets from lawsuits? Whether you make one thousand or one billion dollars it is critical that you protect your business assets.
Following are asset protection tips of the Rich:
Asset Protection Tip #1: Structure your business as an LLC. Donald Trump structures his businesses in this manner. It bulletproofs your business. An LLC structure is the best way to protect your assets.
Asset Protection Tip #2: The magic bullet known as the “Charging Order”.
A charging order says that if somebody sues you they are not able to seize the assets in the LLC if it is properly structured.
Asset Protection Tip #3: Profits can be taken through lawsuits as well. Take your profit income and set up another corporation that is your management company.
Asset Protection Tip #4: Then the IRS steps in. The IRS says that they can impute your income and give it to the person that sues you. This income will be taxed at about 50%.
If your LLC is structured properly, you can use this IRS rule to your advantage. For example, the person who sues you won’t receive your money and will have to pay taxes on it! They have to shell out money even though they didn’t receive the money from you in the first place.
The Charging Order dramatically decreases law suits because people that sue you won’t be able to get at your assets or your income. They will have to actually pay to sue you, so they won’t!
Asset Protection Tip #5: Separate your personal assets from your business and investments. Don’t do business as a sole proprietor, general partners, or DBA. Don’t put things in your name!
Asset Protection Tip #6: Separate businesses and investments from each other. For example, your products are in one LLC. Then have your coaching company in another LLC. Then have your marketing company in a different entity. Basically, the more LLC’s (and separation) the better.
Don’t put everything into one corporation. Why? If the corporation is shut down then everything you have is taken away. If you have separate LLC’s then you will have your other LLC’s to rely on.
Accountants and lawyers will tell you that having several LLC’s is too much of an extra cost and not worth it. Don’t listen to them. The cost is worth it! Plus, you don’t have to have all your LLC’s in one state. It is worth the few extra hundreds of dollars it costs each year to bullet proof your assets.
Asset Protection Tip #7: Act NOW! Many businesses don’t restructure until they are hit with a lawsuit. However, you can’t restructure in response to a lawsuit because that is considered fraud. You need to protect your assets right now and not when a lawsuit hits. You have to lay a foundation for your business structure immediately.
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