QUESTION DETAIL
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How can a business owner protect themselves from creditor lawsuits?
ANSWER
The BIDaWIZ Team's Answer:
Every business owner, no matter how small, should have a Corporation or LLC and have a Tax professional and lawyer help them set it up and advise them on how to manage it. This is the first key to protecting personal assets in the event of a lawsuit and keeping business creditors away from personal assets as much as feasible. Additionally, significant tax benefits can flow with creating different entities--such as reducing self employment taxes and the like.
Responsible estate planning is a key to every families financial plan. Many estates are subject to State and Federal Estate Taxes and these can be avoided and, in some cases, eliminated in many cases with the advice of a Lawyer and Tax Professional through the use of marriage credit shelter trusts and other creative techniques. There are lots of options possible.
Nobody can plan for a lawsuit when it happens, but businesses can do what they can to avoid a lawsuit. Litigation avoidance through air-tight employment contracts, well drawn leases, and general advice from a lawyer before problems crop up is an absolute must. I have found through my practice that the worst litigation problems come from clients who didn't see their lawyers before hand.
Keeping taxes low and assets protected is a team effort with you, your lawyer and your CPA. Its like a 3 legged stool. If one is left out, the entire stool falls. Everyone has to be kept in the loop. Investing in professionals is a must to keep your business the most competitive and to give you the peace of mind necessary to allow you to run your business.
