The process of taking steps to minimize the risk of creditors or other claimants from being able to reach your assets. This can include setting up a different entity, such as an LLC, for each property, business, etc. Thus, if one particular property is subject to a suit (e.g., a tenant is hurt on one rental property) the claimant will be limited to the assets from that particular property or entity. This can prevent a domino effect against your other assets. An LLC, just like a limited partnership, offers important benefits where asset protection is important.
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