4 Strategies on Protecting Your Assets and Real Estate Investment(s)

NEWPORT BEACH, Calif. - May 7, 2016 - PRLog -- Strategy 1 Develop An Asset Protection Plan

Developing an asset protection plan is the most significant action you can take to protect your real estate properties and Investments. This type of planning should be conducted well before any claim arises. Asset protection planning entails deploying different strategies for utilizing insurance, trusts, corporate entities, life insurance and offshore accounts.  An asset protection plan can be developed using expertise from real estate financial planning professionals and legal specialist combined. Developing an asset protection plan is the most significant step you can take to mitigate or manage unknown risks, or exposure.
Strategy 2 Property Insurance
One of the greatest resources that an Insurance Company provides to the average person is the ability to obtain property insurance coverage to protect their real estate assets.  In most instances the policy will protect against unintentional acts of the property owner. For instance in an apartment building if a person accidentally falls and hurts themselves on the set of stairs, the insurance policy would be engaged to cover those prospective losses. On the other hand property insurance does not cover intentional losses for the owner of a property. For instance an owner cannot beat up one of their tenants because they spoke disrespectfully to them and expect the insurance company to pay for damages. If you have more than one property and have a significant amount of assets it is also highly recommended you obtain an umbrella policy which engages after your insurance policy coverage limits have been exhausted.

Strategy 3 Use An Entity to Hold Assets
Using a corporate entity to hold real estate assets is very prudent and wise. The best type of entity to utilize in real estate for asset protection purposes is a Limited Liability Corporation.  One characteristic of this type of entity which is favorable is protection of the corporate veil.  Many states protect individuals owning a limited liability companies not to be held personally liable for torts.  An example of some of these states are Nevada, Wyoming and Delaware. One thing to keep in mind however when using an limited liability corporate is that each asset should be protected as a separate entity.

Strategy 4 Buy Cash Value Life Insurance

One of the greatest insurance products ever offered is the whole life insurance protection policy. Accumulated value life insurance policies provide life indemnity protection. An individual may purchase a whole life insurance policy providing a million dollar death benefit, and in addition a cash value of $100,000. The cash value of these policies is protected, in most instances from many lawsuits or torts, shielding the investor, personally, from actions brought against their interest, including claims by the Internal Revenue Service.

An investor when purchase a whole life insurance policy can fund it, immediately creating significant cash value and asset protection.  Another benefit can also provide a disability option, if the beneficiary of the policy become disabled. Case in point; a real estate investor becomes disabled but is still obligated to make payments on the investment property debt service, but with this policy the insurance company will pay up to 2% of the policy amount directly to the beneficiary for a specific term.  Beneficiaries of whole life insurance policies utilizing the disability portion of their policy should carefully calculate their appropriate policy amounts before the policy is issued.

http://www.birchcap.com/