If you are running a business as a sole owner, and the business is growing well, it is not a bad idea to incorporate it. The biggest advantage of incorporating your business is that your personal assets are freed up i.e. in case of any lawsuit only assets of the business will come under threat. Limited liabilities ensure that your valuable assets are not at risk and further enable you to get additional government benefits such as tax deductions. Moreover, if you have other stakeholders in the business, your liabilities can considerably reduce.
Transfer some of your valuable assets in the name of your spouse, children or other family members. This will again lower your risk levels and provide plenty of protection as most of the assets are not in your name. Exercising this option however, involves a certain amount of risk. This will arise if you decide to divorce your spouse, or your wife dies, in which case your creditors have the legal right to take action against you and seize your assets. In some cases, you and your spouse will be jointly held responsible. Therefore never overdo this practice.
You can further create a holding company which allows you to separate your business decisions from your business assets. Your assets will be owned by the third party, which will lease them back to you i.e. the operating company.
You can exercise a gift option, depending on the state you live in, where you give your assets to your spouse as a gift. Although the assets will be owned jointly but given the fact that they have been recorded in the name of your spouse, they will be automatically separated from your business assets, in case of any lawsuit. However, contact your legal attorney and go through the specifics of this option.
Other options include setting up a college fund account under Section 529 savings plan, where you name your child as the owner of the account. Also get the necessary insurance which provides you certain protection from your creditors.