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Asset Protection 101
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- Опубліковано 3 сер 2024
- If you want to get a good overall view of what asset protection is all about, this is the video to watch. Garrett Sutton and Jason Feinberg of Spotlight Television go over the basics, and some frequently asked questions. For more information on Garrett Sutton and Corporate Direct, visit corporatedirect.com
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DISCLAIMER: The contents of this video are NOT LEGAL ADVICE and do not apply to your specific circumstances. This information is provided for general informational and educational purposes only. Viewing this video DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP. We highly encourage you to seek professional legal advice before acting or relying on any information contained in this video.
A- My primary objective for Asset Protection would be to protect myself from frivolous lawsuits and to secure and ensure the continuity of my assets to prevent my offspring or inheritors from selling them.
I believe the best way to do that is to open up multiple, multi-member LLCs (with my kids as the other members to add another layer of protection by proving that I'm not the sole beneficiary, so the liquidation and sale to settle judgements in frivolous lawsuits would also hurt other parties), to have these LLCs incorporated in a British Crown territory that would reject charging orders from courts from foreign jurisdictions, to have these LLC incorporated into a Cook Island trust to make it difficult for the judge to learn of the LLCs in which I'm vested, and to draw my income in each jurisdiction through an LLP, which has me as an active member(for a layer protection via other beneficiaries of the LLP, so the court realizes that a liquidation of assets to pay for damages would imperil others, well).
I would prefer British Crown jurisdictions to others, even though Belize and Nevis seem to have a high-level of protection, because I wouldn't be sure how well that protection would hold in jurisdictions inherently corrupt to the bone.
B- I also have certain concerns regarding Trusts and questions regarding Foundations because some jurisdictions, like UAE, allow for for-profit Foundations, which seems safer than Trust, since you have a board overseeing your assets and the title isn't transferred to a person running the trust:
1- In many foreign jurisdictions, you can have non-charitable foundations serve as Trusts, so you can have the assets, that you are protecting, in the Foundation's name, instead of the Trustee's name.
2- I have no interest in charity, but I do have an interest in preserving my wealth, so could you highlight the major differences between LLCs, Foundations, and Trusts? I know, unlike an LLC, you don't have shareholders in a Foundation, and unlike a Trust, a Foundation has its basis in Civil Law, and is an entity(like an LLC) not a relationship(like a Trust), but how do these different vehicles differ in asset protection?
3- How would your assets be protected from the insolvency of the Trust Company or the Trustee? My major concern is about a Trustee or Trust company separately preserving your assets, when holding titles to thousands of different Trusts, in the event of getting sued or incurring massive losses on some of the other Trusts. How would your specific Trust be protected from such a loss?
4- I have no interest in non-profit foundations, but would also want some clarity on these: I can't seem to think of any examples where a non-profitable foundation could turn out to be useful for me, when my intent isn't to give charity but to avoid taxes and protect the asset 1) Let's suppose I get an annually depreciating private jet into a foundation, so when it turns absolutely worthless, but If it's making a loss or not earning a charter income, then I wouldn't be incurring a tax liability either, so the whole exercise would seem worthless, and of no benefit to me, aside from, perhaps, asset protection till I've wrung all value out of the asset? 2) Another example would be that of a 2nd home that I seasonally live in, but mostly rent out to let's say "AirBnB". Could i avoid all tax liabilities on that property and even protect my ownership of it by paying the part-time income into a charity, even as I continue to partly use it myself, and then claim it for myself or for my children, when the income has been gifted to the charity for a few years?
5- One potential drawback of hiding one's assets from potential lawsuits might be a violation of the tax laws, but, I suppose, if one registers the LLC as a "C" corporation, one could remain complaint with the tax laws?
C- I would also want some clarity into the minimum legal and logical requirements necessary, for parasites trying to milk me, for succeeding in their attempts to file a lawsuit against me.
D- Finally, I would want to know if I could avoid, limit or lower tax liabilities by incorporating properties, aircraft and yachts owned by me, primarily for personal use, but also rented or chartered whenever not in my use, if, on the whole, the LLC is posting a net-loss, even as I pay for my own use as paid rentals and charters?
1- Let’s presume an employee on a yacht owned by you trips over a step, breaks an ankle to set of a chain of events each turning into a lawsuit against you, and even though you own the yacht through an LLC, the court finds you responsible for hiring the captain whose negligence or improper guidelines or deficient training of the crew led to the incident.
Can the courts do that even though you’re no authority on either choosing the best captains or maritime operations, and, furthermore, you’re a very busy man, who doesn’t really have the time to pay attention to the management of your yacht, and that’s why precisely you’ve hired a management firm and a captain to oversee everything pertaining to the yacht.
Would it be difficult for the court to access your personal assets if you, in fact, chartered the yacht when you were not using it and even yourself paid the charter fee every time you used it, because that would establish the ownership of the yacht through an LLC, not just for asset protection, but, instead, as a business entity for generating revenues and profits, just like any strictly business entity?
2- Could you earn tax credits if the chartering operation didn’t generate adequate revenues to turn a profit? What if you were to fund the loss-making yacht operations from a loan or other source of revenue? This loss could be substantial if you were to factor depreciation in. Could your financing the losses through a loan or another LLC (since you couldn’t indefinitely finance the losses through a loan) help the person suing pierce through multiple corporate veils?
Would it help if you held the LLC through a Trust? Could the Trustee make disbursements to a loss-making LLC?
3- Could you hold it in an irrevocable trust, and, yet, have the management of the LLC, not the Trustee of the Trust, dissolve the LLC, sell the yacht, and transfer the proceeds to the irrevocable trust?
4- Would holding the Trust in a Limited Partnership and operating the Limited Partnership through another LLC, as the general partner, protect your personal assets against the lawsuit, even further.
5- Would it help to have some of the payouts from the LLC, the Trust and the Limited Partnership go to entities that you trust not to usurp your money, like your children, who can be appointed as the members of the LLC and beneficiaries of the Trust? Could the judgement also go against them if you’re the CEO or hold the majority shares, on the LLC, and overruled their objection to appoint the CEO, who, in turn, hired the captain?
6- Could you appoint your children to a board of Trustees or the Foundation?
7- What if you decided to incorporate all of the entities offshore, and wanted to remain invisible through very rigid powers of attorney granted to people you trust or to reputable law firms to represent your interests on the LLC, the Trust, and the LLP, and yet have the power of attorney structured to prevent them from abusing the power vested in them against your interests; that is to prevent them from defrauding you?
Thanks so much for your positive word, you open my eyes
Thanks so much Garret Sutton
Great Advice appreciate it …
❤ Very interesting
Really good questions and answers
Great video
Thank you for this interview! It helped me understand LLC, C-Corp and S-Corp. I will buy your book! Great questions indeed, very useful! But I don't know how to meet with myself :)
Thank you! I'm glad it was helpful information for you. We help people document their annual meetings with themselves. We've got you covered. Check out our ongoing LLC maintenance services at CorporateDirect.com
Yeah but so does Minnesota and Oklahoma
Great video Garrett the info was succinct and informative
THANK YOU FOR SHARING . I'm planning to put up A bussiness what will be my first STEP
Best of luck!
sir, i want to protect my personal residence here in california. Can you help me please ASAP.
Taking advantage of a homestead may help you out. California just raised the homestead amounts substantially. You may want to look into that. You should be able to get homestead info from your county recorder's office.
Just ordered 2 of your books on corps and taxes via Robert's RDPD book!
Hello, a different law firm on UA-cam said that if you registered your WY llc to do business in a different state such as CA then CA laws will apply to that WY and the WY llc will lose the charge order protection?
Do you happen to remember the name of the other law firm? It is an interesting subject, for sure. We do have an optional service called "Armor 8 Protection" in which your certificates are physically held in Wyoming in order to try to force the state to subvert to WY law in cases where a charging order may be a remedy.
Doesn't make sense to set up WY LLC if it has to be qualified in CA, therefore recorded in Sec of State in CA- whats the point then?
If the CA LLC holds title to property in CA, the inside attack by a tenant is the same in all 50 states. The tenant, after insurance, can get the equity in the property that the LLC holds title to.
The value of a WY LLC comes with the outside attack, when the owner of the CA LLC gets in a car wreck. CA is a weak state in this scenario.
I really want your book start a corporation but I cannot afford it in india ugh