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Apr 7, 2009 
Good morning…
In my Asset Protection survey that many of you so kindly filled out a few days ago, I learned a lot about how long you have been in business, and what types of things you are involved in. In addition to this data, I asked a simple open-ended question, “What’s your single most important question about Personal Asset Protection?”
I have found that when one person has a question, that usually means that there are at least 100 others with the same question. So this is a good way to find out what needs to be explained better.
I am now going to answer the first three, and I will get the remainder of them in the coming days…
What are the most important 3 things to consider [in Personal Asset Protection]?
This is a really good question, there are many things to consider but if I had to break it down to three…
Important Thing #1. The first thing to consider is NOT necessarily how many assets you have right now at this moment, but what you are trying to build for the future. You need to put the protective measures in place to protect your stuff in the future and this needs to be part of your planning process.
Important Thing #2. You need to carefully consider every aspect of your personal and business life to determine where you are opening yourself up to any risks of harming someone else through your actions (even if they are a kook and their complaint is 100% drivel). Things like driving cars, selling products that could harm someone, giving bad advice that costs someone money, etc. In any of these cases, you could be sued by the person who was harmed, and they will try to take away your assets to pay for their loss. You need to make sure that you have an accurate picture of what the most likely scenarios of this happening are.
Important Thing #3. You need to consider what structures need to be put in place to that you can contain the damage from any particular lawsuit to just a portion of what you own. Asset Protection has been compared to a castle with multiple walls of defense and each time the invading army gets through one layer of defense, there is another heavily-defended barricade in their way. Your personal assets that you have earned should be kept in the Inner-most “Keep” in your castle. You need to set up legal entities like Corporations, LLCs (and in some cases more exotic things like Trusts) in order to contain any damage to a particular part of your life.
2. What good does Incorporating do?
Another great question…
A corporation is a legal entity that is formed which in many ways is like a new person being born. The corporation is separate and distinct from the owners of the corporation. Once properly set up and operated according to specific rules, it provides limited liability for the owners of the corporation if something were to go wrong.
In the case of a lawsuit against the corporation by a customer, the amount of the damages are limited to the assets that the corporation owns, NOT the assets that the owners of the corporation owns. So you can think of the corporation as a little like a Fire Door. It keeps the financial danger from spreading through your whole financial life and isolates it to just the single business.
3. What is an easy way to keep track of corporate records?
The laws regulating corporations are in many cases very specific about the types of things you need to do in order to be a “real” corporation. Since it is separate from you, even if you are a one-person corporation, you CANNOT operate it as though it is just an extension of yourself. The details of what you need to do are beyond the scope of this answer but in short form you need to have your corporate incorporation documents in proper order, you need to have your corporate stock in order, you need to have a Bylaws and be holding documented annual Shareholders and Directors meetings, and you need to be using Corporate Resolutions in order to document your decisions…
I put together a program for owners of Corporations called “CYA: Cover Your Assets” that is a clear, concise, 7 step system to get your corporate records in great order. With that system, you will be able to be a “Corporate Record-keeping God” in very short order, and if you use the Promo code “PROTECT” when you check out, I’ll knock $100 off for the next week only (till April 15) for being a reader of this blog. That brings the price to $197 which is less than a half-hour with most lawyers…
Have a great day, and I’ll get to more of your questions in the days and weeks ahead, if you have any Questions you want answered please put them in the comments below or there is still time to answer my survey here…
Click Here to Take the Short “Asset Defenses” Survey
I hope this has been helpful, and I hope you have a great day…
Rob
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• Apr 7, 2009 @8:14 am
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