When you spend all your days working hard to obtain properties and other assets, naturally, the goal is to secure the financial future of your family. You don’t go through all of that effort to watch it go to waste. At all times, you’ll want to protect your properties from whatever internal and external forces that can affect its hold and its value.
Try as you may, unfortunately, some factors can affect the viability of your properties. Internally, this could be anyone from your family members that don’t know how to care for the assets, put it to waste, or don’t do anything to make it grow. As to external forces, it could be any lien or encumbrance that may fall to the property in the event of any legal matter that you or your family may face.
Whatever the case, the good news is that there are many ways for you to protect your properties. In doing so, you’re assured that these properties meet the purpose for which they were intended, that is, securing your family’s future.
Here are different means to protect your properties:
1. Use Business Entities
This tip applies to you if you’re an entrepreneur. When you acquire new properties, make it a point to separate your business assets from that of your personal properties. When you mix both properties, it can be effortless for the personal properties that you intend to secure your family’s future to be lost. If there are any business credit or default arise, your property isn’t safe when they’re mixed.
Even a simple business dispute can mean a risk of losing everything that you own. Hence, even in choosing a business entity to set up and which properties to keep separate, you have to consider the intricacies of each business entity type.
- Sole proprietorships: With this kind of business, there’s no limit on the personal liability that you may incur. Depending on the local laws of your state or country, one single mistake can also mean losing your home in the process.
- General partnership: As much as possible, you’ll want to avoid setting up this kind of business entity. The negative thing about this type of business is if your business partner has any personal dispute or loses in a legal matter, even when you’re not involved, you’re still going to be affected.
- Limited partnerships: This is one of the best business entity types for you to set up since it can help limit whatever liability you’re going to incur. Here, you have more control over your money and properties.
- Corporations: For asset protection, this is also one of the best types of businesses to set up.
2. Set Up The Proper Contracts For Protection
When you look to the future, you’re moving ten steps ahead. This means that as you do so, you’re also setting up the proper contracts, early on, to protect your assets. One of the best ways to do so is through estate planning.
Estate planning entails the creation of wills, which, upon your death, is what goes through a probate process in court. To help you along that line, learn more about probate with an expert estate planning attorney.
When you have a will in place, your assets have a sturdy umbrella of protection in such a way that whatever purpose it is you intended your properties to have, these are observed even when you’re no longer around. Then, you also have that assurance that your properties will fall to the rightful heirs in your family.
3. Purchase An Insurance Policy
Another way for you to protect your property is by purchasing an insurance policy. Especially when you’re working in a profession that has greater exposure to liability, you must have insurance as an umbrella of protection. Some of these professions include working as a doctor, lawyer, businessman, and real estate agent.
Here are some of the different kinds of insurance policies that you can sign up to protect your property:
- Commercial liability insurance: This applies when you’ve got some assets intended for business purposes. Here, your business is protected should someone get hurt within your work premises.
- Homeowner’s insurance: This protects your assets in the event that someone gets hurt within your property.
- Auto insurance: Assets or properties don’t just involve real estate or hard assets. Another type of asset that you can own also includes soft assets, like your vehicle. Especially for those of you with quite a number of vehicles, you’ll want to ensure that these vehicles also make it to the hands of your family members or heirs. In the event of an accident, you’ve got insurance that covers you, such that your family doesn’t have to be left in debt trying to pay for whatever repairs are needed.
4. Transfer Some Assets In Your Spouse’s Name
When you’re involved in a tricky case or you, unfortunately, fall seriously ill, it’s also a good time to transfer some assets to the name of your spouse. In most cases, the creditors of one spouse can’t make it chase that of the other. So, you’re able to strategically protect your property from falling into a legal encumbrance.
However, in going through this strategy, there’s one significant caveat for you to remember. Do this only if you know you can trust your spouse. If you’ve been regularly going through marital difficulties that lead you both on the brink of divorce, then it’s best to leave this option out of sight. Else, the division of properties may also be affected once you divorce.
5. Consider Also The Available Homestead Exemption
Depending on the laws of your state or country, you may also be eligible to consider the homestead exemption. This refers to putting your property on home equity, which prevents it from being awarded to creditors.
But, for this property protection strategy, it’s best that you check the laws of your state. Some states offer quite generous protection, while others don’t. So, you should know your limits of what can fall under home equity.
A wise and prudent person doesn’t just spend their days amassing wealth, only to find that it’s put to waste later on. These are hard-earned assets to secure your family’s future. So, you’ll want to ensure that these properties meet the purpose for which they were made.
With these tips, you’re one step closer to ensuring that your assets will stay protected at all times.