THE NEED FOR A PROPER BUSINESS STRUCTURE
There are a variety of business entities that can be incorporated into your wealth preservation plan. A Limited Liability Company (LLC) is a commonly used structure that provides its “members” (owners) with control over assets, without the risks associated with having title in their own personal names.
By owning your assets in an LLC, you are safeguarding them from being pulled into a lawsuit brought against you, as you do not “own” them. The LLC provides higher liability protection than a corporation and, if organized correctly, any potential creditor or litigant would be limited to gaining only a charging lien against the LLC. Your home and other assets (bank account, etc.) may not be touched, because you do not own the business directly, thus you are not personally liable. It’s like being a stockholder in a corporation.
Due to the fact that there are several requirements to properly forming an LLC, you will want to seek an attorney (that has a thorough understanding of such asset protection) to assist you in ensuring that the LLC is valid; otherwise, your safeguarding efforts will be futile. Also, keep in mind, the timing of the asset transfer cannot be done to actively avoid a present creditor, as it may be considered a “fraudulent conveyance.” Therefore, it is important to partake in these asset protection strategies prior to any legal or financial problems.
By utilizing estate-planning techniques, you can protect yourself and your family from unnecessary hassles, while safeguarding your assets. With the help of an estate-planning attorney, there are a variety of tools that can be customized to your goals, and implemented to ensure that you get to enjoy your assets and investments without that pesky law suit target that comes when you own them in your own name.