If we talk about asset protection, it goes more like protecting your available economic resources at the right time and not getting to a dead end when there is nothing left to be protected. If you are a business owner, you would know and understand the technicalities of running and owning a business.

The whole idea is more like a gamble with downsides and jeopardies. One wrong move with loans or wrong investments can sometimes lead you to dead ends. Making profit out of your business isn't enough; there are other traps that come along. One must also protect their business from risks like: entitlements and lawsuits, Debts and mortgage requirements relating to third parties and vendors, employee damage claims, liabilities and issues related to consumer-protection, are just to name a few.

A big or small business owner can suffer from a great asset loss, both in business and personally, if any of these issues are not smartly handled. In order to run your business smoothly, you must know and understand the nature of risks and issues you might face and should also be aware of tricks to handle them in a manner that the loss is limited to a minimal level and doesn’t affect your business’s flow.

Here are some tips to know and handle the risks that might influence your assets and business in particular.

1.    Build a ship before the storm:

You own a business? Be prepared for some frivolous lawsuit and claims heading our way. The best asset protection strategy would be to prepare before the problem itself knocks at your door. Having a sound plan before getting trapped by liabilities and/or lawsuits will naturally leave you with a head start in playing the next move smartly. There are many things that can be done to provide your assets before the arrival of a claim, or liability. It is however true that you can only make some certain moves after the claim and liability but strategies like “fraudulent transfer law” can be done before the claim is made. However, late planning can only leave you (the debtor) and the judge, being accountable to even pay the creditor’s attorney face and with no hope of bankruptcy discharge.

2.    Don’t Own, Don’t show:

If you don’t own assets then creditors are in no position to seize your assets. Therefore, it is better to transfer the ownership to irreversible trusts, through which people from your family can generate an income or you can simply gift these assets to family member, in the first place. This way at a standard amount of asset you will not be suffering from a gift tax charge, which usually leads to a life time gift tax deduction.
In a highly risky profession the most effective and smartest of moves would be to transfer you assets as early as possible.

3.    Be Insured:

The first thing to do when building up your business is to get insurance, both on liability and property. These insurances can help you survive a fraudulent transfer claim or any other claims. For e.g. If you get charged or sued, your insurance company will be paying to fight and settle this claim through your premium payments. In order to effectively utilize your insurance your personal umbrella liability coverage should be for an amount that is at least equal to your net-worth.

4.    Using Retirement:

According to Federal law, ERISA retirement plans are exempted and provided with unlimited asset protection. However this may vary from state to state, some states give more protection to IRA holders while some other provide relief on a lesser amount.

With a good exemption you can move unwanted cash to your retirement account until you are at least 59 years old out of which half would be going into the protected units. You should keep in mind that an annual contribution limit restriction may vary on the type of retirement plan you opt for. You may be judged with penalties if crossing this limit or taking out money before the standard threshold. Retirement accounts are a beneficial tool if you want to protect your savings while receiving tax benefits.
It is better to understand your retirement plans before you choose to get the policy.

5.    Create Business Units:

Solely owning a business can be a blessing but also puts all your personal assets at the risk in case of a litigious claim. Forming a business unit, either a Limited Liability company (LLC) or corporation can provide you with legal protection. Creating separate LLCs or business entities for all your property can also protect you with claims raised by renters.

These are some of the most practiced tips used by business owners to shield their assets. A hood rule of thumb to be a smart business owner would not be a vulnerable target. The open display of conspicuous consumption can attract trial lawyers and lead you to unnecessary lawsuits and claims.