Of all the personal assets to protect in case your business gets sued, your house should be among the most important. Here, attorney Mark Kohler offers five legal factors to keep in mind:
1. Make sure you're operating your business as a proper legal entity.
2. Be mindful of any personal guarantees you sign on behalf of your business.
3. Familiarize yourself with the homestead exemption in your state. It could help protect your home.
4. Also know the "tenancy by the entirety" rule. In about 20 states, it says that no matter what happens to your business, you can't lose your home if you are married, he says.
5. If you have a considerable amount of equity in your home, consider an equity-stripping strategy to protect it.
Mark J. Kohler, a certified public accountant in Irvine, Calif., is a partner in the accounting firm Kohler & Eyre, and the law firm Kyler, Kohler, Ostermiller, & Sorensen LLP, specializing in business, estate and tax. He is the author of What Your CPA Isn't Telling You from Entrepreneur Press.