Press Release (ePRNews.com) - RIVERSIDE, Calif. - Jul 03, 2017 - Being in the building is industry can be one of the most rewarding career paths an individual can take. It is filled with great certainties including huge cash flows, bonuses and incentives.
On the other hand, the building industry has tremendous uncertainties including: economic cycles, project based risks, and employer/employee based risks.
Being involved in the real estate and construction industry for the last 15 years has enabled me to develop tremendous skills about the biggest pitfalls of every developer.
Most developers do not fully grasp the fact that real estate development in the construction industry is very cyclical. It is filled with boom and bust(s). Most industry CEO’s do not protect their key employee or themselves. This includes not having sufficient life insurance coverage to protect them and their families, not deploying asset protection to protect themselves and their families, and most importantly not deploying insurance based products to protect their livelihood, or business.
In the construction industry most contractors and developers believe that property insurance and errors/omissions insurance will cover their losses. I have witnessed instances where errors and omissions insurance and property insurance or liability insurance excluded specific pearls. The exclusions can be severe and very extensive in some cases. Insurance companies are businesses, and they are there to protect their shareholders and often is the case that they exclude coverage.
Every developer or builder should have a backup plan B in place protecting their most valuable assets. One of the most incredible things a business owner in the construction industry or the building industry can do is set up a limited liability business structure. You must separate yourself from the business so that if anything got goes severely bad, can step out.Unforeseen and uncertain liabilities can cause tremendous strain on personal and family relationships. This includes events like: divorce, separation, anxiety attacks, eating disorders and much much more.
Permanent Life Insurance Can Provide Protection
One of the most powerful strategies to protect your building business or construction related business is deployment of a permanent life insurance policy. Permanent life insurance policies in the state of California can be used as an asset protection hedge. According to the state of California mature life insurance policy, including endowment policies are exempt to the extent reasonably necessary for the support of the judgment debtor, spouse and dependents of the judgment debtor.
Now, one could interpret this as being able to utilize your permanent or matured life insurance policies as a asset protection vehicle. This asset protection vehicle may provide protection from lawsuits, and various liabilities born out of the business of construction.
Moving on, a permanent life insurance policy for mature life insurance policy can be deployed very strategically and effectively. For example, a building industry executive can use his or her corporation as a conduit to fund a mature life insurance policy. A mature life insurance policy that we usually see deployed for financial planning purposes are indexed Universal life insurance which provide an opportunity to direct cash value amounts to an equity indexed account. Equity indexed accounts can be linked to indices such as the Standard & Poor’s 500 or the NASDAQ 100. Although these policies have exposure to the preceding indices there are some limitations. But more importantly, these policies can assist in the facilitation of huge lump sum of asset protected cash value.
Our main reason for being in business is to take care of our families and ourselves and not allow the risks of a construction industry to allow us to lose everything. For this reason, the deployment of this and this sort of strategy in a small business, construction related or building industry related would be significant consideration.
Business Structure Is Important
When I first started my company in the real estate sector I started out as a sole proprietor. Sole proprietors are very low cost efficient and can provide legal access to being a business owner in the state of California. But there are some tremendous caveats to being a sole proprietor, there are some significant tax disadvantages which may impact you in the future. On the other hand as your company or institution grows one may consider forming some sort of a corporation. There are different types of corporations including; S corporations, LLCs, and C corporations, to name a few popular ones.
More significantly, an entity needs to be established to protect you, the owner, and your beneficiaries. Asset protection and estate planning can be very complex and costly if not completed properly. Another factor in anti-selection is privacy. Some entities do not allow for piercing of the veil, or private shareholder information disclosures. To establish a very comprehensive business structure selection I would highly recommend you sit down with a licensed attorney to give you insights on the benefits and advantages of each type.
About Birch Capital Inc.
Birch capital Inc., is a California-based registered investment advisor, and licensed real estate firm focused on financial planning, asset protection for the building and construction industry.
To learn more about Birch Capital Inc. and services, please contact
Ali Roushanzamir, media relations
http://www.birchcap.com Source :
Birch Capital Inc.
Business Info : Birch Capital