After years of hard work, you have finally amassed a significant number of assets. You have more than enough to live comfortably for the rest of your life while also providing the same comfort to your family.
However, if you fail to protect your assets, you might end up with nothing in the event of an unfortunate incident. No matter how careful you are or how skilled and knowledgeable you are as an investor or entrepreneur, there is no guarantee that your hard-earned assets will be kept safe from potential dangers like lawsuits.
There’s a number of ways to protect yourself from these dangers. Here are some ideas that you can use as an individual or as a business owner:
Use proper contracts
Whenever you get into an agreement or you plan to finalize a deal, it would be wise to use physical written contracts. Not only would this serve as proper documentation and evidence; it also protects you should you act negligently or you are sued in court.
Another good reason for having contracts is their validity. In the eyes of the law, only contracts that are signed by all parties involved are considered binding. This means all agreements, deals, and the like in the form of text messages, e-mail exchanges, and even telephone calls are not considered official. Contracts can also put in certain stipulations that can help you or your company should you be in any sort of legal battle.
Buy appropriate insurance
Insurance is important for any individual or business entity, so make sure you set aside some funds for this. Getting insurance gives you the ability to take care of an unplanned and unwanted incident. But make sure you get the right type of insurance. There are multiple types of insurance out there and it might be confusing to choose from them. Choosing the right type of insurance can either save you from your troubles or make things worse.
An example of which would be the formation of a captive insurance company. This is a type of corporate self-insurance and is different from your standard business insurance. But as a precaution, you can opt to buy umbrella insurance that can cover a multitude of areas.
Place assets in your spouse’s name
If you believe that the risks are too high, you can always work around certain situations. One of which is to place your assets in your spouse’s name. Generally, creditors of one spouse are not allowed to touch the assets of the other. This is where a prenuptial or postnuptial agreement can be beneficial for both parties.
However, there are some disadvantages to this asset protection strategy. In the event that you and your spouse separate, you can no longer claim your assets. So, one should always plan accordingly and learn all the risks that may come with every move.
While there is no foolproof plan to secure all your assets for every instance and occasion, the tips above may still prove valuable. If you want a more detailed explanation for your specific needs, hire a law firm that specializes in asset protection, business litigation, and taxation.