California Business Asset Protection: Knowing the Difference Between Internal and External Claims

4:12 am Uncategorized

No matter how robust the precautions your California corporation takes to avoid accidents or other unforeseeable events that could cause a judgment, the possibility is always there. For this reason, it is important for you to understand the manner in which your assets could be taken from you in the event your business is sued and what a California business asset planning lawyer can help you.

To begin, there is something called an internal claim – this type of claim essentially covers the type of accidents or other occurrences that affect only one aspect of your business. Say, for example, that your corporation owns a restaurant and a patron was burned on a plate that was too hot when it arrived to his table even though your staff informed him the plate was too hot and to be cautious. In this instance the (internal) claim could only go after the assets of the restaurant (such as equipment there and the real property owned by the restaurant), and not the assets held by other companies under the umbrella of your corporation. In addition, this claimant would not be able to sue for your personal assets.

The next type of claim is an external claim. This type of claim applies to another kind of scenario. For example, if your corporation owns a forklift and a pedestrian walks by while the forklift operator is not paying attention (and found to be negligent) and hits the pedestrian, the injured party may be able to sue for other assets held by other entities of your corporation and even go after your personal assets.

Both internal and external claims are good cause for steel belted asset protection. A California asset protection attorney such as Jeff Matsen can help you devise an asset protection plan in which different entities owned by your corporation are held by many different companies. An LLC can be established to hold real property, another can be set up to own equipment, and Matsen may also suggest an asset protection trust to own your home – this will make it far more difficult for a claimant to sue for your personal real property.

Talk to a California estate planning attorney who offers asset protection for corporations. It could be the best business decision you ever make.

Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.

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