Asset Protection
A business owner’s guide to protecting wealth.
For most business owners, the company is both the source of their wealth and their single biggest liability. Protecting it, in both directions, is one of the most important things you can do.
Entrepreneurs pour years of work into building something valuable, and in doing so create a concentrated, visible, high-liability asset. A thoughtful protection plan keeps a single lawsuit from threatening both the business and the family that depends on it. Here is the complete picture.
Protect your personal assets from the business
Operate through a properly formed LLC or corporation so a claim against the business stops at the business, not your home and savings. This shield holds only if you maintain formalities, separate accounts, records, filings, and choose a protective state of formation. Carry adequate general-liability and umbrella insurance as the first line.
Protect the business from your personal creditors
The reverse risk is just as real: a car accident or personal guarantee shouldn’t let a creditor seize your company. Strong charging-order protection (form in a state like Wyoming) and owning the business through an asset protection trust keep the enterprise intact.
Separate the valuable from the risky
Hold operating activity in one entity and valuable assets, real estate, equipment, intellectual property, in another, leased to the operating company. An operating lawsuit then can’t reach the crown jewels. Multiple businesses should each sit in their own entity, often under a holding company.
Coordinate with estate and succession planning
Your business is likely a cornerstone of your estate. Coordinating asset protection with succession planning ensures the company passes intact, protected, and tax-efficiently. And as always, protection must be built before a claim arises. Tresp, Day & Associates designs and maintains these structures for owners nationwide, call (858) 755-6672.
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Since 1992, Tresp, Day & Associates has structured asset protection for families and businesses nationwide. Request a consultation or call (858) 755-6672.
Common questions
Frequently asked
How do business owners protect their personal assets?
Operate through a properly formed and maintained LLC or corporation in a protective state so business claims stop at the business, keep corporate formalities, and carry adequate insurance. Then protect the business from your personal creditors through ownership structure and strong charging-order protection, separate valuable assets from operating risk into their own entity, and, for significant wealth, own the structure through an asset protection trust.
Should I hold my business real estate in the same company as my operations?
Generally no. Holding valuable real estate in a separate entity from your operating business, and leasing it to the operating company, means an operating lawsuit can't reach the property. It's a core principle of business asset protection: separate the valuable, lower-risk assets from the higher-risk operating activity.
This article is general information, not legal or tax advice, and does not create an attorney-client relationship?
This article is general information, not legal or tax advice, and does not create an attorney-client relationship. Every situation is different and the law changes; consult a qualified attorney about your circumstances.
This website is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Every situation is different; please consult a qualified attorney about your specific circumstances.
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