{"id":3432,"date":"2018-06-29T13:14:56","date_gmt":"2018-06-29T17:14:56","guid":{"rendered":"http:\/\/www.lawofficeresponse.com\/assetprotection\/?p=3326"},"modified":"2022-06-01T13:35:31","modified_gmt":"2022-06-01T17:35:31","slug":"top-3-most-common-asset-protection-misconceptions","status":"publish","type":"post","link":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/top-3-most-common-asset-protection-misconceptions\/","title":{"rendered":"Top 3 Most Common Asset Protection Misconceptions"},"content":{"rendered":"\r\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Asset Protection Misconception Number 1: Insurance Protects You<\/span><\/h3>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">You know what I hear the most from my clients, who are exclusively real estate investors? \u201cI thought all I needed to protect my assets was a general liability insurance policy?\u201d This couldn\u2019t be more further from the truth.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">I have nothing against insurance, but when you think about it, they\u2019re <\/span><i><span style=\"font-weight: 400;\">almost<\/span><\/i><span style=\"font-weight: 400;\"> a criminal business. When you get insurance, you\u2019re betting against yourself. An insurance company is like the house in a game of casino poker. In the end, they never lose. And even if the insurance company pays out for a claim, you still lose because they\u2019re going to raise your monthly premium.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">The truth is you do need insurance. But insurance alone won\u2019t be enough to protect your assets. Insurance policies include what are called \u201cexclusions\u201d. Insurance companies include exclusions in your contract to minimize their losses. Remember, their goal is to make a profit, just like you.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Unfortunately most people won\u2019t sit down and read these exclusions. And even if they did, they probably wouldn\u2019t be able to understand the complex legal language insurance companies use in their contracts. What these exclusions do is prevent you from suing a company for any particular reason, as outlined in the \u201cexclusion\u201d. It could be an exclusion for something as simple as a fire caused by a microwave, to a volcanic eruption.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Most liability insurance policies will protect you from a slip and fall. That\u2019s it. When a lawsuit comes around, your insurance company will be nowhere to be found. This is why you need a real asset protection strategy. A proper asset protection strategy is supported by:<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Smart contracts<\/span><\/li>\r\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Legal entities such as LLC\u2019s, Trusts, and Corporations.<\/span><\/li>\r\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Insurance<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\n<a style=\" font-size: 1.5em;text-transform: uppercase;text-decoration: none;font-family: Arial, Helvetica, sans-serif;padding: .3em .6em;letter-spacing: .05em;color: #333;\" href=\"javascript:\/\/\" data-opf-trigger=\"p2c135917f238\">GOT QUESTIONS&#8230;  JUST CLICK HERE!<\/a><script type=\"text\/javascript\" async=\"true\" src=\"https:\/\/app.ontraport.com\/js\/ontraport\/opt_assets\/drivers\/opf.js\" data-opf-uid=\"p2c135917f238\" data-opf-params=\"borderColor=#fff&amp;borderSize=5px&amp;formHeight=973&amp;formWidth=100%&amp;popPosition=mc&amp;instance=n1452363127\"><\/script><br><br>\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">What I like about this bullet pointed list is that it shows how insurance is only one third of an asset protection strategy. If you\u2019re a real estate investor and you only have insurance, that\u2019s the equivalent of going into battle with only one third of the ammo you need.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Asset Protection Misconception Number 2: Forming A Legal Entity Guarantees Your Protection<\/span><\/h3>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Yes, LLC\u2019s, Trusts and Corporations do provide you with some serious legal protections. But that\u2019s only if you properly set them up and maintain them. You can\u2019t just form an LLC and do anything you want.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">For example, once you have an LLC you have to be extremely careful about not mixing your business assets with your personal assets. The reason you form an LLC in the first place is to separate your business assets from your personal assets. If someone sues your LLC and the court finds out you used your business credit card for personal reasons, such as getting a haircut or going to see a movie, a judge will allow a plaintiff access to your personal assets.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">So the moral of the story is, when using a legal entity like an LLC, be sure to keep careful records of your business related transactions, and <\/span><i><span style=\"font-weight: 400;\">never mix business with pleasure.<\/span><\/i><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Asset Protection Misconception Number 3: An Asset Protection Strategy Can Be Put In Place Later And Still Protect You<\/span><\/h3>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">I can\u2019t tell you how many times I\u2019ve received a call from a real estate investor seeking to put in place an asset protection strategy after someone\u2019s just filed a lawsuit against them. Asset protection isn\u2019t like a hat you can take on and off when you please, it has to be put in place well in advance of a lawsuit. This is because there are laws that basically make transferring assets in the middle of a lawsuit illegal.<\/span><\/p>\r\n\r\n\r\n\n<script type=\"text\/javascript\" async=\"true\" src=\"https:\/\/app.ontraport.com\/js\/ontraport\/opt_assets\/drivers\/opf.js\" data-opf-uid=\"p2c135917f239\" data-opf-params=\"borderColor=#000000&amp;borderSize=5px&amp;embed=true&amp;formHeight=1352&amp;formWidth=100%&amp;popPosition=mc&amp;instance=2136377719\"><\/script>\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Article reference: <\/span><br \/><span style=\"font-weight: 400;\"><a href=\"http:\/\/www.royallegalsolutions.com\/3-common-asset-protection-misconceptions-explained\">www.royallegalsolutions.com\/<\/a><\/span><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>Asset Protection Misconception Number 1: Insurance Protects You You know what I hear the most from my clients, who are exclusively real estate investors? \u201cI thought all I needed to protect my assets was a general liability insurance policy?\u201d This couldn\u2019t be more further from the truth. I have nothing against insurance, but when you [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":8392,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,50],"tags":[],"_links":{"self":[{"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/posts\/3432"}],"collection":[{"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/comments?post=3432"}],"version-history":[{"count":6,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/posts\/3432\/revisions"}],"predecessor-version":[{"id":8393,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/posts\/3432\/revisions\/8393"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/media\/8392"}],"wp:attachment":[{"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/media?parent=3432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/categories?post=3432"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/wp-json\/wp\/v2\/tags?post=3432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}