In order to protect your assets, you have to know what jeopardizes them and what to do about it. Additionally, you need to know a few things about our legal system. So our goal here is to give you insight into understanding legal liability. Your assets can be categorized into unsafe and safe types. Nobody is going to slip and fall on your bank account or crash into your cash. But your vehicles, rental properties, business location, etc. can be assets that produce liability. So, that should be taken into account during your asset protection planning.
Related content: What is an Asset Protection Plan?
When planning your asset protection, you must take into account the existing liability, the value of the asset, etc. Then determine what kind of vehicles you will use and how many are necessary. There is no one single asset protection plan that will work for every individual. If you are a real estate investor and you have 4 rental homes with very low equity, you don’t need to create separate LLC’s for each home. Use one LLC. If you own four rental homes that are paid for and worth hundreds of thousands of dollars, it is a different story. You would then start to separate these into multiple LLC’s. Again take into account liability, risk and your exposure. Then determine exactly which home(s) get an LLC and how to complete an asset protection plan.
Business real estate produce an incredible amount of liability. If you own your building, office or shop, you would look into splitting up those properties into multiple LLC’s. The basic rule of asset protection: the higher the liability, the more precautions you need to take.