Wealth and Asset Protection For The Small Business Owner
When you start a new business the last thing you think about is losing your assets to lawsuits, taxes, or estate issues. Yet, those are three very real threats that face every startup founder or company founder from the moment they launch their venture. Is it any wonder with this additional stress on top of the constant tasks required of a small business owner that so many companies go under within the first few years?
Protecting your assets should be one of your biggest priorities from day one. So, how do you make sure they are secured?
Overpaying On Taxes
While large corporations are often given special treatment through tax loops and a forgiving system acting in their favor, small businesses get the short end of the stick. Especially as they grow, with profits or selling the company leading to huge tax opportunities for the IRS. You can be sure they take the chance for the cash.
The biggest way to protect yourself from overpaying in taxes each year is by setting yourself up as a charitable organization that is recognized by the IRS. This method is called a Charitable Remainder Trust (CRT).
Setting up a CRT will protect you from capital gains taxes that accumulate as you grow. So when your business becomes more successful and gains value, you won’t find yourself paying huge fees if you choose to sell.
Every year millions of lawsuits are filed in the United States against businesses and their owners. Many of those lawsuits could be considered frivolous, and some may even be attempts by the competition to push you out through legal intimidation.
Unfortunately, just the legal fees associated with defending yourself in court can take you into the thousands. If you win, you may be able to gain this back. But your assets themselves may be subject to collection if you lose, even those not owned by the business.
Though you can gain some protection through incorporation, an LLC will put a better wall between yourself, your possessions, and your company.
Estate and After Death
Hopefully you will live a long and prosperous life. But everyone passes away someday, and that will leave what you built behind. If you haven’t protected your assets they could be subject to estate taxes, squabbling over who gets what, and fees that may rip out a big chunk of the wealth that would have gone to your family.
A customized plan by a profession that has been tailored to fit your business is the only way to go. It will turn liquid assets into something more stable, and ensure that you retain as much as possible under your estate, passing it on to exactly who you want to.
Don’t Wait For Problems To Arise
You don’t have to wait for issues to creep up to protecting your wealth. You can start right now, no matter how far into the process you are. All you need is a certified professional to help you along the way.