<h2 class = 'uawtitle'>The Importance Of Asset Protection Planning And How To Implement It</h2><br />
<div style='font-style:italic;' class='uawbyline'>by Tiffany Gill</div><br /><br />
<div class='uawarticle'>As your financial portfolio keeps growing, you should stake steps to protect your assets. One practical solution is taking advantage of asset protection planning strategies to minimize the risk of losing what you own or being taxed heavily. Asset protection involves structuring business and property ownership to make it very expensive or impossible for a plaintiff to reach the assets of a defendant.<br />
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If a plaintiff attorney finds out that it is too difficult for him or her to collect against your assets, he or she will be willing to settle on terms favorable to you or refrain from filing a lawsuit altogether. Properly structured plans of protecting wealth do not deal with hiding assets or secrecy. Instead, they utilize common structures like limited liability companies and trusts in a way that legally, ethically and effectively shields the wealth of a professional or other entity from any creditor or lawsuit.<br />
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After investors implement plans to safeguard their wealth, they can rest assured that their assets will be safe even if lawsuits are filed against them. To create such a plan, investors have to be objective and clear about their goals and start early. One effective strategy of shielding wealth from lawsuits is increasing the limits of liability insurance. Individuals can make sure that the amount of their umbrella liability coverage equals the amount of their net worth.<br />
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It is also important to protect yourself from tenants. If you own a number of rental properties, consider creating a business entity like a limited liability company or corporation in order to shield your other assets from disgruntled renters. In this way, if a tenant sues you for any amount, he or she can attack the assets in the entity which holds the real estate but the other wealth you own will be safe.<br />
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It is also essential that you review the joint accounts you have. If you have money in joint accounts with your business partners, children, roommates or elderly parents, you can lose it if the joint account holder is sued or gets divorced. As a precaution, make sure that you do not place a large amount of money into a jointly held account.<br />
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People who own partnerships should make sure that they formalize their businesses. It is risky to operate informal business partnerships since the actions of one partner affect the other partner. If one of them is sued, the assets of the other partner can be jeopardized. Investors should either avoid establishing partnerships or formalize them. They can also opt to form entities such as corporations and limited liability companies to keep their assets safe.<br />
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The other method of protecting assets from creditors is placing them into asset protection trusts. They provide a way for business owners to transfer a portion of their wealth into a trust run by independent trustees. These trusts can allow you to shield even the assets your children own.<br />
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Some strategies of <A href="http://www.assetprotection.com">asset protection planning</A> are simple. One of them involves transferring your assets to the name of your spouse. You can also put more money into a retirement plan sponsored by your employer to benefit from unlimited protection. Another way to protect your personal assets is to keep them separate from your business assets.<br />
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