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TRUMP UNIVERSITY WEALTH BUILDING 101

Recordkeeping

Make sure you operate your business entities according to the law. First and
foremost, maintain your corporate records on at least a yearly basis. When
you decide to sell your company, or undergo an audit, a properly kept corpo-
rate binder can be an invaluable resource. There are two types of corporate
records: initial records and annual records. Initial records include the Articles

of Incorporation and various other documents that enable the officers to set
up the corporate structure. Annual records include Annual Shareholder
Meeting Minutes and Special Meeting Minutes.

Insurance: The Defense of Last Resort

One question I’m often asked is whether insurance can provide enough asset
protection. My answer is, “It all depends.” Insurance proceeds are only paid
according to the terms of the policy. With that in mind, ask yourself these
two questions if you’re thinking of relying on an insurance policy for asset
protection:

• What events does your policy cover? Typically, there are only certain events
covered. Damages, including punitive damages, and damages that
result from an intentional act, or failure to act, won’t pay you a dime.
• What limits does my policy have? What are your policy dollar limits, and
are they enough to protect you?

Suppose an employee intentionally injures a third party, and a jury fi nds
your business responsible for $1 million. Your policy’s liability insurance has a
policy limit of $50,000, and your company is only worth $200,000. It’s very
likely that your insurance policy doesn’t cover “third-party actions.” Even if it
does, any judgment over $50,000 will have to come out of your business, which
means you are personally liable for $750,000, because you didn’t set up an
alternate source of asset protection. You stand to lose both your business and
your personal assets.

Essential Steps to Protect Your Assets

Protecting your assets depends on the strength of the asset security system
you design and install. Recognize this, and take these five steps to ensure that

the lawsuit you face won’t be the one that wipes out both your personal and
business assets:

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