Risk Management is Broad and Ambiguous!

The area of Risk Management is in itself broad and ambiguous! We will give you the highlights and let you fill in the details unique to your situation.

Earlier, we suggested you give consideration to separate asset ownership by a corporation or business trust. This structure works on the basis of segregating assets whereby they are treated individually, rather than having “all the eggs in one basket”.

The shield, corporate and/or business trust, structure should be as comprehensive as your financial situation dictates and allows. If multiple investments are to be protected, they should be segregated and owned by as many entities as individual investments. The ideal structure is one major asset per entity. This may seem like overkill, but if adversity hits and the shield not in place, all is at risk!

The entities which have asset ownership MUST be kept at arms length. If they are not, someone will successfully drill around the shield, pierce the entities veil and seize the asset.

Do not own stock in the corporation, nor be named as a beneficial interest holder in the business trust. If you are to operate this scenario successfully, the mind-set must be, “I don’t own anything!” While you don’t own the company, you may be employed by and operate it, or several companies for that matter.

The maximization of profits is the goal of every free enterprise. That should be yours without equivocation.

Profits and taxation are strong considerations. These will be discussed elsewhere.