Asset Protection for your small business, with attorney Mark Balsom. Mark explains various aspects of an effective comprehensive asset protection plan for your business and your personal assets.

NOTE: The information shared in this episodes is shared as general knowledge and education, and is not specific legal advice for any individual. You should seek individual legal advice before implementing or applying any of the tactics or advice discussed in this episode.

Mark Balsom is an attorney who represents individuals and businesses to help them with developing and implementing comprehensive asset protection plans.

When this interview was recorded, Mark was with the Presser Law Firm, based in Boca Raton, Florida. Mark and the team at Presser Lay Firm, help their clients protect their hard-earned assets from lawyers, malpractice claims, creditors, foreclosure deficiencies, former or current spouses, children, relatives, and greedy lawsuit-obsessed citizens.  While many people can make money, few know how to protect it.

Mark lives in Delray Beach, Florida.

The topics addressed in this episode include:

• Asset Protection – protecting all of your tangible and intangible assets from creditors and lawsuits.
• Legal Entities – operating your small business under a legal entity like an LLC or Corporation.
• The role of Insurance in protecting your small business.
• Considering Life Events (like marriage, divorce, death) and the potential impact on your small business and assets.
• The 5 Fatal Mistakes small business owners make that exposes them to potential liability.
• The 8 Keys to a good Asset Protection Plan for your small business.
• The 3 Maxims of Asset Protection.

5 Essential Asset Protection Strategies for Small Business Owners

For small business owners, safeguarding personal and business assets is a critical aspect of financial planning and risk management. Asset protection strategies can help shield your assets from potential lawsuits, creditors, or unforeseen financial setbacks.

Here are five tips for asset protection, including insights from renowned experts in the field.

1. Choose the Right Business Entity: The structure of your business plays a significant role in asset protection. Operating as a sole proprietorship offers little separation between personal and business assets, making personal assets vulnerable in a lawsuit. Forming a Limited Liability Company (LLC) or Corporation can provide a legal shield, separating personal assets from small business liabilities. Arnold S. Goldstein, a noted author on asset protection, advises, “Choosing the right business entity is the first line of defense in asset protection. It’s about creating a legal barrier between your personal wealth and business risks.”
2. Maintain Corporate Formalities and Separate Finances: Once you’ve established a business entity like an LLC or Corporation, it’s crucial to maintain corporate formalities and keep personal and business finances separate (avoid comingling of personal and business funds). This includes having separate bank accounts, credit cards, and keeping meticulous records of all business transactions. Hillel L. Presser of the Presser Law Firm emphasizes, “The integrity of your corporate veil is as strong as your commitment to corporate formalities. Blurring the lines between personal and business finances can make your personal assets fair game in a lawsuit.”
3. Obtain Adequate Insurance: Insurance is a key component of any asset protection strategy. This includes not only general liability insurance but also professional liability insurance, property insurance, workers’ compensation insurance, and, in some cases, umbrella policies for additional coverage. Insurance can provide a first line of defense against claims and lawsuits, protecting both your business and personal assets.
4. Use Contracts and Legal Agreements Wisely: Well-drafted contracts and legal agreements can significantly reduce your risk exposure. This includes client contracts, employment agreements, and lease agreements. Ensure that your contracts have clear terms and conditions, and consider including clauses that limit your liability. Regularly review these documents with a legal professional to ensure they provide maximum protection.
5. Consider Asset Protection Trusts: For additional protection, you might consider setting up an asset protection trust. These trusts can shield your assets from creditors and legal judgments. However, they must be set up correctly and in compliance with the law. As Goldstein notes, “Asset protection trusts can be a powerful tool, but they require careful planning and a thorough understanding of legal and tax implications.”

Asset protection for small business owners involves a combination of legal strategies and financial planning. By implementing these tips, you can safeguard your hard-earned assets against potential threats, ensuring the long-term stability and success of your business. Remember, the best time to think about asset protection is before you need it, not when facing a legal challenge.

Resources:

Books mentioned in this episode:
[We receive commissions for purchases made through these links (more info)].

• Asset Protection Secrets
  America s Top Asset Protection Attorney reveals the newest, most effective strategies to protect yourself against lawsuits… creditors… divorce… foreclosure… and other deadly threats that can financially destroy you!
• Financial Self-Defense: How to Protect Everything You Own…From Everyone…Every time!
  Financial Self-Defense provides the reader a complete step-by-step primer on the practical and effective strategies they can take to insulate every type asset from losses due to lawsuits, bankruptcy, divorce, tax problems, foreclosure and other financial disasters. The book also demonstrates the need for defensive planning and how defensive planning can be advantageously integrated with estate, tax, investment and other financial planning objectives. Financial Self-Defense also highlights many of the common mistakes that people make which increases their liability exposure and further endangers their wealth. Rather than a do-it-yourself guide, the book emphasizes the need for professional assistance.
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