Asset Protection
No one goes into business wanting to lose his shirt. But, in today’s litigious society, how do you prevent it? The answer is layers.
Be aware States offer varying degrees of protection. Illinois offers certain protections for business owners, but other States offer more. Think about the types of business vehicles that may be utilized as well as the ownership arrangement. The type of business vehicle you choose depends on a great deal of factors including: Who’s contributing what to the business? Who’s going to get what from the business?
Bear in mind you want to put assets with varying degrees of risks into different business vehicles. For instance, it is preferable not to have a large investment account held in the same vehicle as rental property. The inherent risk of each is quite different.
Certain business vehicles have been around for a long time such as the "S" corporation, but new ones keep emerging such as the Limited Liability Company. Depending on your needs, the list is almost endless.
Illinois allows you to hold your personal residence as Tenants by the Entirety while other States, such as Delaware and Florida, allow you to hold everything as Tenants by the Entirety, which is a special type of ownership only available to married couples, including civil unions.
Proper asset protection is a thorough discussion between the client and attorney laying out all the facts and concerns. Plan for the worst and hope for the best.