The concept was introduced in 1970s by Barry Engel. Asset protection is the art of safeguarding ones property such as real estates, money from creditors and plaintiffs. Every property owner aims at protecting his/her valuables from any form of attack by ensuring maximum security. More so, increased criminal activities in residential and commercial areas has seen the rise of security levels to safeguard individuals and their businesses. Business people can protect their business from debt defaulters, theft and catastrophes such as fire and flood that may occur. Also for the couples, one risk losing money if in an event of divorce he/she had deposited more amount in the joint account than the partner because half of the amount goes to the partner.
Conducting risk assessment if vital in asset protection, this helps one in determining the degree of protection of ones assets. Business people are the most beneficiaries of this plan because their activities involves customers, creditors, suppliers and employees who increase the probability of losses. In addition, identifying the impact of one type of risk to another is essential because if one sector incurs loss it will spread to another area. In asset protection, there are essential factors that need to be analysed. These factors include, identity of the person engaging in asset protection planning, nature of the claim, identity of the creditor and nature of the asset.
Let’s have a look at some of the asset protection strategies that can help one protect his/her property.
Separation of assets.
This applies in family situations, couples who have joint account may suffer in an event of divorce. According to the law, partners will take half the amount even if their contribution was less. Keeping assets in separate account is an excellent idea because spouses can only get money from others at their will and not being pushed by the law.
Create an independent business entity
Owners of rental property need an independent business entity to shield other assets from discontented tenants. It helps in protecting other assets in an event where the tenant sues the property owner because he/she can only attack the unit that holds the real estate leaving other personal assets safe.
When in partnership, one is responsible of the partner. A claim touching one person can put all their joint possession at risk. If one person is involve in an accident while on business trip, the other person assets are at risk.
Separate personal assets from the company
This can be achieved by creating a business entity that protects personal assets from the company. If one is sued your personal assets are protected and one can only target the company assets. So if the worst happen one will only lose the business and save personal assets.
Large and small business people benefit from this plan because they are protected from any form of attack. During tough times, when businesses are under performing there is a high probability of being sued by the creditors. If one has not protected his/her assets, people may reap large amount of money leaving one broke.
Gives one ample time in using the assets
Once protected one can keep, money in personal account without the fear of any kind of attack.one can access money easily when in his/her account than when in a relatives account. This also minimizes the risks of losing money when in other people’s account.
Protecting one’s personal property minimizes conflict because, if business people are operating a joint business venture, personal property remains safe even if one of the partners has incurred loss while on business trip.
In conclusion, asset protection is a necessity I today’s world if one wants to remain with his property. With increasing cases of theft, natural calamities and conflicts in families, asset protection helps one in safeguarding his/her property. Besides, business people are able to operate their businesses in a conducive environment which allows growth of the business. One is free to borrow loans and also supply his customers without fear of making loses. Lastly property owners stand a good chance of managing their rentals separate from personal properties. It helps them dealing with risks that are associated with their client’s claims.
Countries: United Kingdom