Protecting your assets is essential to having a healthy financial life and protecting yourself from any adversities that may arise in different areas of life, be it love, business, disagreements with partners, etc.
A widely used strategy for this protection is called asset shielding.
This process is not related to one action or another, but a set of measures, which aim to protect assets from market uncertainties, court decisions and even personal issues.
When the shielding process is done well, the entrepreneur’s assets are protected.
When it comes to protecting assets, many people see it as something less than noble. In general, this thinking is fueled by a lack of knowledge about how the process works.
It is possible to legally and very efficiently protect assets.
The armoring process encompasses a wide variety of assets, such as cars, money, investments, real estate, among others.
With the intention of explaining in depth the mechanisms, processes and legal steps and instruments that you should use to protect your assets, we have prepared this article.
What is a holding company?
When we talk about asset protection, it is inevitable to talk about asset holding. This mechanism has been legal in our country since 1976, after the creation of the Companies Law.
This strategy consists of creating a company whose sole purpose is to manage the assets of a group of people. These people must share ownership of the company.
According to the Companies Act, a holding company does not carry out commercial operations, as its sole purpose is to manage the assets under its control.
Holding companies have assets from other companies in their composition, such as real estate, automobiles, copyrights, securities and any other “goods”.
With the holding company taking over the assets, the assets cease to be, in practice and before the law, those of a natural person.
Thus, they become the property of a legal entity. In addition to the equity holding company, there are other types of companies of this nature:
- pure holding;
- controlling holding;
- holding company;
- mixed holding company.
How to protect personal assets?
Now we will talk about the steps and some strategies you should take to protect your personal assets. They are:
- 1 Create an “Offshore” Company or Bank Account Abroad ;
- 2 Creation of a holding company;
- 3 Marriage under the regime of total separation of assets;
- 4 Dating contract;
- 5 Donation of goods with reservation of usufruct;
- 6 Establishment of family property.
1 – Create an “Offshore” Company or Bank Account Abroad.
This action is one of the most efficient, but also one of the most maligned when it comes to protecting assets.
This prejudice against “offshore” companies is the result of a lack of knowledge about the mechanism, as well as the country’s tax rules.
The fact is that it is not illegal to create “offshore” companies in countries with low tax collection, as long as the entire process is carried out in compliance with tax laws.
In any case, it is essential that the process is accompanied by professionals with experience in the subject.
2 – Creation of a holding company.
This option has already been mentioned previously, but we will reinforce it. This action basically consists of creating a company responsible for managing the assets of a group of people, protecting them from legal action.
It is worth noting that this action is legal and supported by law.
In addition to protecting the individual who carries out the action, this mechanism protects the partners of a company. Imagine a company with 2 partners and one of them gets divorced.
If shielding mechanisms are not created, the other partner may lose assets because they are not protected in a properly secure and legal process.
3 – Marriage under the regime of total separation of assets.
Marriage is a legal instrument that influences a number of factors.
In practice, it works by creating a contract between two people, who will share their lives, and all the legislation for this couple becomes different the moment they sign the papers.
Love is important, but at this moment it is necessary to act rationally.
Family law experts are adamant that the best alternative to protect assets is the complete separation of assets.
This action practically eliminates the possibility of losing assets through divorce.
However, it is worth noting that each situation is a specific case, which must be analyzed in order to provide the best response. But, without a doubt, this option is the most reassuring among those available.
Furthermore, debt incurred by either spouse during the marriage is not the partner’s responsibility when the regime chosen is a total separation of assets.
4 – Dating contract.
In addition to marriage, it is important that you pay attention to another relationship, which generally precedes marriage: dating.
Precisely because it is a transitional phase, dating can be understood, in some cases, as a stable union, a situation quite similar to marriage.
That is, those who do not prepare in advance may end up being surprised by a situation that could affect their assets.
This contract is made by public deed and has some basic clauses. Obviously, it is important that you seek a lawyer specialized in this type of contract.
It is quite simple: it involves two people who must assume the status of boyfriend and girlfriend and who have no interest in starting a family.
In this way, the possibility of the partner claiming in court half of the asset acquired during the estate is reduced to practically zero.
5 – Donation of assets with reservation of usufruct.
This procedure is another legal strategy that an individual can use to protect their assets. It works as follows: a person or company donates their assets — but retains the usufruct of the assets.
In other words, he is no longer the ‘de facto’ owner, but in reality, he continues to enjoy all the assets.
However, the possibility of debts and other issues affecting the assets is ruled out. In general, the usufruct is valid until the individual’s death.
With this mechanism, a legal instrument is created so that donated assets can be liquidated to pay future debts.
6 – Establishment of family property.
One way to protect assets is through Law No. 8,009/90, which allows an asset to be made unattachable. This action (establishment of a family asset) must be done in advance.
It must be done with the registration in the property registry or after the debts arise, which depends on the judgment of the appeal by the judiciary.
What is financial protection?
Financial protection, in a simple and straightforward way, is the protection of assets. There are several ways to do this, but stick to the legal mechanisms, such as those listed above.
There are several ways to do the shielding and it is best to combine different strategies in order to make the result more complete.
Why does the holding company protect assets?
The holding company protects assets because it is a company created exactly for that purpose.
The assets of an individual are now protected, and the possibility of legal proceedings directed at the company or individual affecting the assets acquired by a specific person is eliminated.
Therefore, asset protection is essential to protect assets and must be done by everyone in advance, thus anticipating problems that may occur over time.
Ignore emotional and passionate thoughts when taking care of your assets and always act rationally.
