So a creditor can’t seize your personal assets if the corporation can’t pay its bills. There’s no personal liability for corporate debts, contract breaches or personal injuries to third parties caused by the corporation or its employees. Generally, a C corporation provides limited liability exposure to the personal assets of its principals. Let’s briefly review the three primary forms of ownership:Ĭ corporation. Thus, you might consider changing the ownership structure to create a corporate shield. Some popular ideas revolve around the form of business ownership and the use of trusts.ĭepending on the structure of your business, you may have adequate protection from creditors, minimal protection or none at all. There are, of course, various strategies you might employ based on your circumstances. This can deter creditors and possibly thwart the seizure of assets. When you create an asset protection plan proactively, you add a layer of protection before any claim or lawsuit arises.
The first lesson to be learned is easy: Don’t think this can’t happen to you. Fortunately, there are several options to consider that may provide asset protection.īefore digging deeper, you should start with an understanding that an asset protection plan is needed to insulate your estate from the claims of creditors and lawsuits. It would be a shame if creditors were able to reach your assets before you’ve transferred wealth to the younger generation. If you’re a business owner, you’ve likely worked long and hard to achieve your goals.
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