As you know, there are over 80 million lawsuits filed every year in the United States. Frivolous lawsuits alone are said to cost the United States over $200 BILLION annually.
Even in this current economy, things could turn and go back down. If money gets tighter, will more get desperate? How many entrepreneurs abandon their business, which was their vehicle for financial success, and now look to a much easier approach…like suing you and your business.
Does someone look at you as their retirement plan? For many Americans, their only option for retirement is to win the lottery or sue someone. I know, not very uplifting, but conceivably reality.
This may be the last wake up call to button up your asset protection plan, tax and bookkeeping, and business credit, so you and your family are protected. Unfortunately, one entity is not a catch-all for results.
Let me ask you these important questions to show where you may be very vulnerable:
1. Do you still operate a side business as a sole proprietorship? That is like playing Russian Roulette with your financial future.
2. Do you own real estate in your own name (separate from your residence)? Even if you do not have any equity, to others, you must be rich and a target. That is like walking around with a big sign on your forehead that says, “I own real estate in my own name, check it out online…go ahead and sue me.”
3. Are you relying upon your living trust to protect your assets? They do not protect from liability! Do you have family members or parents that are doing the same? That is an open invitation for someone to take their net worth.
4. Do you own safe assets in your own name (like gold and silver)? Is it enough to protect with a separate legal entity from your operating business? Maybe it is a “small” amount in general.
You have to ask yourself how you would feel if you woke up tomorrow, and your “small” investment was gone?
Now…that may be a different feeling. Losing 100% of your investments, no matter how “small,” maybe a huge deal to you. It is time to protect them before it is too late!
5. Are you operating a business with a partner as a general partnership on the side? That is a double danger because now your partner could cause you to lose all your assets.
Are you waiting to make more money first…remember, you cannot buy homeowners insurance when your house is on fire…and you cannot protect yourself (very well) after you have been sued.
If you have $100K in assets and are sued for $100K, you cannot form an entity and transfer them to protect them (well, you can do anything you want, but…) the judge will call that fraudulent conveyance and undo your transaction if your goal was to protect your $100K because of the $100K lawsuit.
If you had $200K and you did not mind leaving $100K on the table to be taken, that is different…but why be in that position when there is a better way?
This is only one threat your business is up against. The other is the IRS (and they are hurting big time when collecting tax revenues).
Are your records up to date? Do you have any records other than an online checking account balance? That is not a business but a hobby, according to the IRS. Finally, is your business financially naked?
How much revenue are you losing on a daily, weekly, or monthly basis? Read the article on how to position your business to be financially naked and have an opportunity for success.
See holes in your plan? Email NCP at support@LaunchWithConfidence.com.
We can help you plug up your holes so you will be protected and can sleep at night!Tags: asset protection, financially nake, living trust, sole proprietorship