Maintain Adequate Insurance Coverage Analysis
Perhaps the biggest single financial tragedy would be to build up a substantial net worth, only to have it seized as part of a legal action against you. All of your hard earned assets will go right down the drain in a single court decision. But you can protect your money from lawsuits and other legal grabs. You just have to use a few of the right strategies to make it happen.
Try using these to protect your assets.
Maintain Adequate Insurance Coverage
Insurance is your first, best defense against lawsuits and legal claims, because it exists largely for that purpose. It creates a layer of financial insulation between you and a claim for damages.
Make sure that you have adequate coverage in regard to homeowners, auto, life, health, and especially …show more content…
In the event that a legal claim exceeds the maximum coverage that you have under another insurance policy, the umbrella coverage will pay the difference. That will prevent a plaintiff from going after your financial assets, and even your home or business.
Incorporate Your Business
If you are self-employed, then you may need to consider turning your business into a distinct legal entity, that way your personal assets will be protected in the event of legal action.
Incorporating your business is one way to do this. Under a corporation your personal assets will be protected in the event of an action against your business.
The other alternative is to set up a limited liability company, more commonly known as an LLC. These can protect your personal assets from actions against your business in much the same way that a corporation does. The advantage however is that an LLC as fewer restrictions than corporations, which is why they have become such a popular form of business ownership.
Since legal action is probably more likely to come against your business than against you personally, setting up a corporation or an LLC is an excellent line of
Try using these to protect your assets.
Maintain Adequate Insurance Coverage
Insurance is your first, best defense against lawsuits and legal claims, because it exists largely for that purpose. It creates a layer of financial insulation between you and a claim for damages.
Make sure that you have adequate coverage in regard to homeowners, auto, life, health, and especially …show more content…
In the event that a legal claim exceeds the maximum coverage that you have under another insurance policy, the umbrella coverage will pay the difference. That will prevent a plaintiff from going after your financial assets, and even your home or business.
Incorporate Your Business
If you are self-employed, then you may need to consider turning your business into a distinct legal entity, that way your personal assets will be protected in the event of legal action.
Incorporating your business is one way to do this. Under a corporation your personal assets will be protected in the event of an action against your business.
The other alternative is to set up a limited liability company, more commonly known as an LLC. These can protect your personal assets from actions against your business in much the same way that a corporation does. The advantage however is that an LLC as fewer restrictions than corporations, which is why they have become such a popular form of business ownership.
Since legal action is probably more likely to come against your business than against you personally, setting up a corporation or an LLC is an excellent line of