Consider all the time you have spent or will spend building your business – and then consider how much energy you have spent on how to protect it or protect your family from it.
Unfortunately, many small business owners don’t give much thought to asset protection until it’s too late – when a suit is filed, a divorce happens or a creditor comes after them.
The National Federation of Independent Business says that small businesses make excellent targets for frivolous lawsuits because they will usually settle out of court rather than spend what it takes to go to trial. It is estimated that the average number of times a business is sued over the lifetime of its owner is five times. Even if you are a good person.
Here are 5 tips for small business owners to protect assets:
1. Don’t hide your assets. If you get sued, prepare to divulge what you have. You will likely face a deposition with opposing counsel asking about your assets, so lying is committing perjury. Instead, have a good asset protection plan in place – then you can disclose without worry.
2. Don’t transfer assets to family or friends. They may have bigger problems than you do. GIving away your assets as a form of asset protection is a risky strategy. There’s far better ways to handle things.
3. Don’t put assets in a spouse’s name. Anyone can be sued for any reason, so putting assets in a spouse’s name is no guarantee that your assets are protected and if