By Kathy Kennebrook (The Marketing Magic Lady) Discusses the Importance of Protecting Your Assets
Throughout your life, no matter who you are or how you earn your living, you need to be concerned about protecting your assets. Your assets may include your home, vehicles, jewelry, boats, artwork, properties and whatever other assets you accumulate along the way. After all, you work hard for what you have and there are always going to be people out there who want something for nothing. The more money you have the greater a target you become, and you’ll want to protect yourself from frivolous lawsuits.
In the real estate investing business this is especially true. The real estate business is one of those where you will be piling up assets quickly. If you are holding properties and you have tenants or tenant/buyers in your properties, this can make you an even bigger target for possible lawsuits. For this reason alone you want to be holding your assets in another entity, such as a land trust in order to keep your name off of public record. The main advantage to purchasing properties in land trusts or other entities is anonymity. If everything you own is in your own name, it makes it easy for someone who wants to sue you to find out what you have. If a plaintiff’s attorney looks on public record and it appears that you have nothing, you are much less likely to be sued.
If you are holding properties in land trusts, corporations or LLCs this prevents your name from showing up on public records; making it appear that you don’t personally own anything; and that is the whole idea. You want to hide your assets from creditors and predators. There are a lot of people out there who want what you have, but they don’t want to work to get it.
As you begin to grow your real estate business, you need to begin thinking about protecting yourself and your assets along the way. Make sure you begin working with a reliable real estate attorney who can help you grow and protect your business. Make sure they understand the importance of purchasing properties in land trusts or in entities that do not represent you personally. If they don’t want to do things your way, find someone who will.
In addition, you want to be thinking about placing other items of value that you own, such as bank accounts, jewelry, vehicles, boats or artwork in property trusts. This will protect these assets from showing up should you be sued for any reason.
You also need to be working with reliable a financial planner and a CPA in your business in order to protect you assets by investing them well with a diverse portfolio. Your CPA will also help you hold on to your assets by finding ways for you to legally pay fewer taxes on the income from your business.
The real estate business is one of those businesses where there are a lot of great tax deductions for you if you structure your business correctly. You also want to think about diversifying your assets so that you don’t have all your “eggs” in one basket. As the markets continue to fluctuate this becomes even more important for protecting your assets.
Your CPA and your financial planner can also help you structure your assets so that if something happens to you, your assets will be distributed to children, grandchildren, charities or whomever you choose in a way that is fluid with the least amount of taxes and stress. This way there is no question as to how the distribution of your assets will be handled if something were to happen to you and this can save your family a lot of hassles later on.
Protecting your assets while you are still around to enjoy them is going to be very important to securing a future for you and your family. For more information on asset protection and all other aspects of real estate investing, visit my website at www.marketingmagiclady.com.
Written by dulce.
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