Guest guest Posted December 29, 2001 Report Share Posted December 29, 2001 > I did find a way to protect most of my real assets, though. I plan on > setting up a family trust and putting my house and any valuable property in > it, so at least they will be protected from litigation, as the trust, not me > or my husband, will own the assets. Of course, this doesn't protect us from > having wages garnished, but at least we wouldn't be homeless. Kathy, a family trust is something that I believe many people should have today. It allows your estate to pass to your heirs without going through probate and depending on how it is set up can be a great help in deferring estate taxes for a long time. It does need to be updated periodically as laws change and that is an added cost. You also should have all your assets within the trust which some people find burdensome. Whether it will protect you against a lawsuit of not is a different matter. While legally the trust owns the assets, you-the owner-control them. In a lawsuit any good attorney will follow the money and if it looks like you are hiding assets within a revocable trust, they definitely will attempt to attach those assets. Don't forget that a family trust is a revocable trust where you can add or take from the trust at will. I believe that in a business situation that a corporation will give you more protection. A corporation is also a separate entity that holds your business and as long as you treat it as such, you should have more protection. I agree with Jules that, yes, you can be sued as well as your corporation, but if you follow the rules you would have to be found guilty of fraud or gross negligence for your personal assets to be attached. If you don't follow the rules and treat the corporation like something you own then it would be easy for an attorney to go after your personal assets. I have a corporation and I don't find it that much extra work. True, you have to file an extra tax return and there are some other documents to file, but there are also many tax advantages from a corporation. Regardless of how you set up your business or attempt to hide your assets, there is no substitution for insurance. If you are named in a lawsuit and it is obvious that you either used a corporation or trust or any other way to avoid getting insurance, you will pay the piper. Pat. Peace, Joy, Serenity House of Scents tm. Body Oils, Fragrance Oils, Incense, Candles, Soap, Etc. pat@... http://www.houseofscents.com/ Quote Link to comment Share on other sites More sharing options...
Guest guest Posted December 29, 2001 Report Share Posted December 29, 2001 In a message dated 12/29/01 9:16:09 AM Pacific Standard Time, achil@... writes: > . I have a corporation and I > don't find it that much extra work. True, you have to file an extra tax > return and there are some other documents to file, but there are also many > tax advantages from a corporation. > I have to agree with Pat. We have incorporated our business and I believe it was a good move for several reasons. We choose to have an accountant that prepares both our personal and business taxes and he has been a tremendous help and is well worth the cost, which is not that much by the way. Angie The Herbarie...Visit us at: http://www.theherbarie.com for Body Care Products and Bulk Ingredients...Botanical Extracts and Proteins, Ultra-Mild Surfactant Blends, Conditioning Emulsifiers. Quote Link to comment Share on other sites More sharing options...
Guest guest Posted December 29, 2001 Report Share Posted December 29, 2001 Hi all, Well, it looks like I don't qualify for RLI, as I buy in bulk and re-bottle and sell under my own label. I did find a way to protect most of my real assets, though. I plan on setting up a family trust and putting my house and any valuable property in it, so at least they will be protected from litigation, as the trust, not me or my husband, will own the assets. Of course, this doesn't protect us from having wages garnished, but at least we wouldn't be homeless. Even better, my husband's uncle sets up trusts for his living, and has offered to barter labor from my husband (an electrician), and some of my oils for the service (which would be greatly discounted, anyway). I will continue to search for general business insurance coverage, with product liability included, but the family trust was something I wanted to do for estate planning anyway...I just hadn't thought about it in a few years. Uncle also said, as one of you who replied to me pointed out, that incorporating no longer shields you from liability. My accounted said the paperwork would be incredible if I incorporated or set up a limited partnership, or such. Hardly worth the effort for a business I work for free for (someday I'll make money!). lol I also read a government page yesterday that said that product liability suits have dropped over the last 10 years by over 70%, and that the average payout was less than $25,000, not including legal fees. So, while we still live in a lawsuit-happy society, people generally don't sue over a rash. Meanwhile, I'll also make sure I label my products correctly and just try to do it right to cover my butt. Thanks for your input. I look forward to reading more about this and really appreciate your replies. Peace, Kathy O. Quote Link to comment Share on other sites More sharing options...
Guest guest Posted December 29, 2001 Report Share Posted December 29, 2001 >>Regardless of how you set up your business or attempt to hide your assets, there is no substitution for insurance.<< Absolutely, Pat! Speaking as someone who's currently in litigation I can tell you that having a liability company that you know will really go to bat for you is woth every penny you'll spend for coverage. Barger Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.