Asset protection means placing personal and business assets beyond the reach of any potential threat. Ariel Enisman, attorney with the Presser Law Firm, says the No. 1 goal with asset protection is to become such a difficult target for a lawsuit.
“Make yourself look like such a difficult target and so expensive for someone to comes after you,” she says.
During Lawn & Landscape’s Top 100 Executive Summit in Denver, Enisman explained that a well-structured asset protection plan involves ensuring that business owners own nothing but control everything.
“Get ownership rights out of your name,” Enisman says. “If you own something you’re exposed.”
Keys to good asset protection plans include protecting every asset, make sure the asset protection plan fits with financial goals, keep the plan up-to-date, develop a plan that is simple yet cost-effective.
In order to have a strong asset protection plan in place, Enisman says the following are some of the biggest mistakes business owners should avoid in order to protect their assets:
1. Hiding your assets. Enisman says it’s not about hiding what you have. It’s better to be upfront with your assets so that they can’t come back to hurt you in the long run.
2. Titling your assets to “straws.” “What makes you think this person is less likely to get sued than you?” she says. Putting your assets in the name of someone else just to cover your bases is not the best way to protect what you have. Your friend or co-worker can get sued just as easily as you and lose their assets – and yours.
3. Titling your assets to spouse. Similar to assets in the name of another individual, giving your assets to your spouse can be just as risky. Enisman explained that if you own a vehicle that is registered in both your name and your spouse’s name, both the owner and the driver can be sued rather than just one party.
4. Don’t break any laws. This may seem like a no-brainer but following laws to protect your assets will save you from devastating lawsuits. Make sure everything you do is 100 percent legal before taking action.