As the end of another year comes to a close soon and you are getting ready for your plans for the new year, you may evaluate all your assets properly protected?
Here are many of the common strategies that often turn into costly mistakes (that you may not have considered):
- All your business ventures in one business. Yes, if you are starting and testing 3-4 different revenue streams, that may be ok in one entity but if two or three are really taking off, why put all of that in one business entity (other than it is easier). Would you put all your investments in one stock? Probably not. Why? Too much risk. The same strategy applies to a business (don’t put all your eggs in one basket).
- Real estate in your own name (outside your principal residence) even without equity may be a lightning rod for lawsuits, best in a separate entity.
- Too much equity from real estate in one LLC. Especially if the equity is a high percentage of your net worth, suppose you have three properties free and clear worth $400K each, which is 80% of your net worth, that makes no sense to have in one LLC. Remember, your living trust does not protect assets from liability.
- Business with a partner in the same entity as the operating business you own 100%. At the end of the day, you make your partner owner of your main company, which may not be what you intended.
- Holding safe assets or investments (crypto also) outside your retirement plan in your own name/brokerage account or your living trust (remember your living trust provides ZERO liability protection but protection from probate taxes).
- Doing business in the U.S. with your home country entity, not knowing that maybe bringing undo liability to your home country business.
It is a great time to form a new complete entity formation (which we do in all 50 states) as you get ready for the New Year.
If you need help to form another entity to protect another business or other assets, see our packages below, including a video overview and pricing. Questions? Email email@example.com. Here are our steps for a Complete Formation for a 50 State Formation.
Here are our steps for a Complete U.S. Company Formation.
As we get closer to the end of the year, we may choose to have the IRS start date on the SS4 application to be January 2021 vs. 2020. If you are forming an entity that would trigger a year-end return for 2020.
Feel free to forward to any friends or business associates who may need support to protect their business or personal assets. I really appreciate any help you can provide.Tags: 50 state entity, asset protection, safe assets, US entity