An asset is anything of value that you can convert into cash. But when it comes to personal assets, these can be your money, house, property, car, and financial investments. They can also include your jewelry pieces, valuable artwork, and even home goods.

It’s safe to say that you’ve accumulated your assets over time through hard work. As such, the last thing you want to happen is to lose them in an instant. If you don’t keep your assets secured, you can lose them to a lawsuit, bankruptcy, and even collections from creditors.

There are legal ways to protect your personal assets. That said, here’s what you must consider doing:

1. Ensure the protection of your homestead

A homestead refers to your residential property. However, it doesn’t only cover your house but also the surrounding lot. In some cases, it includes a farmhouse with the land devoted to livestock and crops. Know that home protection varies from one state to another. As such, know your state’s protections and avail one for your homestead.

2. Have a protection cap for your IRA

An individual retirement account (IRA) is one thing you must consider for your future. It will protect you as you grow older. An IRA is a savings account where you can save and invest for the long term. And on top of this is that it comes with tax advantages. Know that you have a protection cap of $1 million against bankruptcy proceedings for your contributions to Roth IRA.

3. Get a qualified retirement plan

For the uninitiated, a qualified retirement plan gets established by an employer. The goal is to provide retirement income to employees and their beneficiaries. It’s good if you’re working with a retirement plan offered by your employer. Keep in mind that assets in employer-sponsored plans have unlimited protection from bankruptcy. And this applies to your retirement plan as well.

4. Obtain life insurance

There’s no denying the importance of life insurance. This contract between you and your insurer will financially protect your beneficiaries in the event of your death. They can use the lump sum of money to pay for your mortgage, fund your children’s education, and even cover monthly utility bills. That way, it can secure your family’s assets even if you have already passed away.

5. Get auto insurance

Your car is considered your personal asset. It’s good that getting car insurance is required in most states. Sure, you may be paying your premium every month. However, in case of a car accident, your insurance will step in to pay for the damages incurred. Ultimately, having auto insurance is one way to protect your vehicle as your asset.

6. Have a down payment for your mortgage

It’s best to invest in a property with the help of a mortgage. If you have extra money, it’s best to use it for your deposit or DP. That way, you’ll have a lower monthly contractual payment (MCP). As such, you won’t have a hard time keeping up with your monthly payments until you pay off the loan. Ultimately, there is nothing more fulfilling than finally owning your house as one of your assets.

7. Set an APT in place

It’s a good idea to have an asset protection trust (APT), which is precisely what it is—protecting your assets. This trust holds your personal assets as a way to shield them from creditors. In fact, it is the most robust protection from creditors and lawsuits. As such, it’s best to work with a reputable attorney who can help you set an APT in place.

8. Pull the equity out of your assets

Equity refers to the amount of money you are entitled to or own. A perfect example is the home equity on your mortgage, which is the difference between your outstanding balance and your home value. You can pull this equity from your asset (or property) and put the lump sum of money in another one that your state protects. That way, you won’t easily and quickly lose the money, should there be a potential lawsuit.

9. Transfer assets to an FLP

If you have personal assets, it’s best to transfer them to a family-limited partnership (FLP). In this case, the FLP now owns your assets. Under the Uniform Partnership Act (UPA), they now get protected from creditors. But still, you have control of the FLP and, of course, your assets as well.

10. Separate business assets from personal assets

The rule of thumb is to separate your business and personal assets. They must not go hand in hand. For instance, don’t mix your personal finances and business income in one bank account. Should your business go bankrupt, you will lose your own money as well. By doing so, you’ll end up financially broke.

At this point, you now know how to protect your personal assets. All it takes is to follow some of the legal steps recommended above. Keep in mind that your assets are the fruits of your labor. They significantly contribute to the overall quality of your life. Hence, you must do what it takes to secure them at all costs.