Asset Protection

Asset protection for small business owners.

For most small business owners, the business is both their livelihood and their largest exposure. Protecting it, and keeping its risks away from your personal wealth, takes deliberate structure.

By Tresp, Day & Associates · November 20, 2020

The short version Small business asset protection works in two directions: keep the business’s liabilities from reaching your personal assets (through the right entity, in the right state, with formalities maintained), and keep your personal creditors from reaching the business (through ownership structure and, for real wealth, a trust layer). Add adequate insurance and separate valuable assets from operating risk.

Owning a small business means wearing every hat, and carrying risk from employees, customers, contracts, and the general litigiousness of doing business. Because so much of an owner’s net worth is usually tied to the company, protecting it is protecting the family.

Protect personal assets from the business

Operate through a properly formed and maintained LLC or corporation so a claim against the business stops at the business. This shield only holds if you respect formalities, separate accounts, records, and filings, and choose a protective state of formation.

Protect the business from personal creditors

The reverse risk matters too: a personal lawsuit against you shouldn’t be able to seize your company. Ownership structure, holding the business through the right entity or an asset protection trust, and strong charging-order protection (see Wyoming) keep the business intact.

Separate the valuable from the risky

Where possible, hold valuable assets (real estate, equipment, intellectual property) in a separate entity from the operating business, and lease them to it. That way an operating lawsuit can’t reach the crown jewels. Tresp, Day & Associates helps owners build and maintain these structures.

Ready to protect what is yours?

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 small 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, and respect corporate formalities so the shield holds. Also protect the business from your personal creditors through ownership structure, separate valuable assets from operating risk into their own entity, and carry adequate insurance. For significant wealth, add an asset protection trust layer.

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.

Here to protect what is yours

Speak with our skilled attorneys.

Request a consultation to create a customized protection plan for your family and business.