Formal Business Structures (Corp, LLC, LLC, LP, etc.) create a valuable tactic to protect yourself against creditors. Many individuals in a partnership or ownership of a small business may not realize the potential exposure of their “personal” assets. In a partnership, you are responsible for your partner’s actions! A lawsuit against the partnership for your partner’s actions (or inaction) could leave you personally liable for a lawsuit recovery. Similarly, closely-held small businesses may leave you personally liable for any judgment held against the company. Incorporation may provide a layer of protection for your personal assets should any legal action against the company arise.
Trusts can provide another form of asset protection. The language of the Trust can provide various “fail-safes” in which you are personally protected against potential creditors. For more information on how Formal Business Structures and/or Trusts can protect you and your family’s assets, please contact the attorneys of Barber Jackson, PLLC.