There’s nothing quite like owning a business. Whether you are considered a small business owner or a business owner; protecting your interests in the business and other assets should be at the top of your to-do list at all times.
With more than 29 million small businesses in the country, according to the Small Business Administration, you should take a page out of their book and protect your business at all costs. This includes speaking with an experienced business attorney from The TERRY LAW FIRM who knows the laws of your state and can guide you in the right direction when it comes to protecting your business.
Separate Your Business and Personal Interests
It’s important that you separate your business and personal interests or else it could be a recipe for disaster. You don’t have to formally define the structure of your business to keep your assets separate. This is easily done by having a personal bank account and a business bank account that can be used for expenses. It’s also smart to have separate credit cards. These are requirements when you file for an LLC or other corporations.
Choose the Correct Business Structure
Many small businesses get off the ground by operating as a sole proprietorship. This can only last so long as the legal risks will begin to mount, especially if you utilize contractors or hire an employee. You can open yourself up to lawsuits if someone gets injured or you choose not to work with them anymore.
You can choose from any of the following business structures:
- C Corp: Separates business and personal assets. Shareholders and a board of directors will be required.
- Limited liability corporation (LLC): The profits of this type of business are reflected on the tax return of the business owner. You can protect yourself from personal liability when registered as an LLC.
- General Partnership: An agreement between no less than two people. Each owner holds personal liability for the debts of the business.
- S Corp: Profits for the business pass through to the owners or shareholders and are only taxed one time.
Business Insurance Cannot be Overlooked
You cannot overlook business insurance. Consider business insurance just as important as health and life insurance. Leaving your business uninsured can lead to lawsuits against your personal and business assets. Even though you are protected from some liability when incorporated, but business liability coverage can provide you with a lot of protection.
Does Your Business Comply?
A business attorney will be able to review your company’s operations and determine if you comply with all of the laws and requirements in place for your type of business structure.
Examples of compliance for businesses include the following:
- Paying business taxes
- Paying state and local fees
- Filing specific documents
- Maintaining accurate and thorough business records
It is possible that you could be held personally liable if your business fails to comply with state and federal regulations. For example, if you do not file the appropriate business taxes, you could be held liable personally.
Asset Protection is Proactive
Asset protection is a proactive process and not a reactive one. It is impossible to protect your assets after a claim is filed against you or your business. However, you have all the power in the world to protect your assets when you plan ahead. Be proactive with your business. Protect your personal and business assets before it’s too late.
Call The TERRY LAW FIRM to Schedule a Consultation Regarding Your Business Today
The experienced business attorneys at The TERRY LAW FIRM can answer all of your questions regarding business structure, personal liability, and protecting your assets. Contact our office today to schedule a consultation. The more you plan, the less likely it is that you or your business will face lawsuits or other liability issues.
Looking for an Asset Protection attorney in Sumner, Tacoma, Puyallup, Bonney Lake, Auburn, Edgewood, Kent, Federal Way, Lakewood, Enumclaw, University Place, St. George, Washington, Hurricane, Santa Clara, Ivins, La Verkin, Toquerville and surrounding WA and UT communities? Terry Law Firm is here to help. Contact us for expert legal representation in Washington: 253-299-6800 and Utah: (435) 922-7100.
Frequently Asked Questions
What is asset protection planning?
Asset protection planning uses legal structures – such as irrevocable trusts, LLCs, family limited partnerships, and strategic asset titling – to shield your wealth from potential creditors, lawsuits, and liabilities before a legal threat arises.
Who needs asset protection planning?
Business owners, real estate investors, licensed professionals (doctors, contractors, architects), and high-net-worth individuals are the most common candidates. Anyone with significant assets exposed to professional liability, business risk, or personal lawsuits benefits from a proactive plan.
Is asset protection legal?
Yes. Using recognized legal structures to organize and protect your assets is entirely legal. The key is acting before a creditor claim or lawsuit arises. Courts scrutinize asset transfers made after a claim is filed as fraudulent conveyances.
What is the difference between asset protection and hiding assets?
Asset protection uses lawful legal structures – trusts, LLCs, and titling strategies – that are publicly filed and fully disclosed. Hiding assets is illegal. Asset protection plans are built on transparency and compliance with state and federal law.
How do Washington and Utah differ for asset protection planning?
Washington and Utah both allow domestic asset protection trust structures, but the rules differ. Utah has a specific Domestic Asset Protection Trust statute that provides strong creditor protection after a seasoning period. Washington’s rules are governed by the Washington Trust Act. Attorney Scott Terry is licensed in both states and structures plans accordingly.
When is the right time to start asset protection planning?
The earlier the better. Plans put in place before any legal threat are the most defensible. Transfers made close in time to a creditor claim can be challenged as fraudulent. Terry Law Firm works with clients in Sumner, WA and St. George, UT to plan before problems arise.
