Dangerous Asset
Definition of 'Dangerous Asset'An asset which, by its nature, creates a substantial risk of liability to the asset owner. Dangerous assets include commercial real estate, motor vehicles and construction equipment.Risk of personal injury and/or property damage is higher with dangerous assets. For example, a truck, by its mere use, has the potential to cause physical harm to its occupant as well as bystanders. |
|
Investopedia explains 'Dangerous Asset'Because dangerous assets carry with them a greater risk of liability for personal injuries and property damage, for asset-protection purposes a single business entity should not own more than one dangerous asset. In addition, dangerous assets should not be commingled with safe assets.For example, if your limited liability company (LLC) owns your commercial real estate as well as your company's bank accounts, a person who is injured while on the property could sue the LLC and not only pursue the property to satisfy his/her claim, but the business bank accounts as well. Often, it's best to place a dangerous asset, such as your business property, in a separate entity, such as a real estate trust, with your safe assets held in a family limited partnership (FLP) or LLC. |
Related Definitions
Articles Of Interest
-
Pros And Cons Of Offshore Investing
Tax loopholes are shrinking, but there are still plenty of viable prospects. Get the big picture. -
Are Your Bank Deposits Insured?
Learn how the FDIC is helping to keep your money in your pockets. -
Your Will: Why You Need A Power Of Attorney And Beneficiaries
What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection. -
Find Fortune In Commercial Real Estate
Investing in big buildings means big money - and bigger risks. -
Asset Protection For The Business Owner
Could incorporating your business help protect it? Find out here. -
Retirement: The One Thing Couples Shouldn't Do Together
Staggering retirement can have both financial and emotional benefits for married couples. -
Top 5 Budgeting Questions Answered
You don't need a degree to understand your money, begin saving and pay down debt. -
Investing In Medical Equipment Companies
Learn the basics about medical equipment companies and how investing in them can benefit growth and value investors alike. -
Tax Variations Of The HEART Act
The HEART Act is designed to allow service members and reservists make a smooth financial transition into active duty and back into civilian life. -
What is a monopoly?
Monopoly is a fun family game, but in real life, a monopoly can be dangerous to a country's economy. A monopoly occurs when an industry or sector has only one producer of goods or retailer for ...
Free Annual Reports