Hedging Risk With Trusts
You’ve worked hard for your success, and along the way you have acquired assets — real estate, stock, business ownership, classic cars, private aircraft, artwork, jewelry — items that are of significant value to you. You want to protect them and pass them on quietly and smoothly to the people you love but keep control of their value and direction. And most importantly, you want minimize liability, and fully enjoy the benefits of these assets contribute to your lifestyle.
Everyone worries about protecting their assets. Yet many who share your concern have their financial affairs dis-organized in ways that leave them exposed to loss from life’s predators. Your emotional well-being is constantly distracted by government procedures, the media, lawsuits, accidents, and debilitating illness. Unknown surprises or other unforeseen entities, actions and circumstances can leave you in a mental fog. These nasty experiences take your money and bite your spirit.
What Ever Happened to Privacy?
Social change. Years ago people respected financial privacy. They never asked how much money you earned or how much you paid for your house. If they did you wouldn’t tell them. “It's none of your business.” And it was difficult for them to find out. Family financial matters were understood to be confidential from neighbors and outsiders.
Technology changes have removed paper file barriers. Barriers to financial privacy are non-existent with the internet. Databases have exploded. Nosy people ask you personal money questions on impulse, or they’ll search online to find out. Unless you’re using private trusts for holding assets, the Internet easily reveals details of what you own to anyone.
The best way to protect your privacy, your assets, your family, and yourself — is to change the game. Title your assets into one or more private trusts.
Trusts are financial devices ranging from the well-known Living Trust to those designed for specific assets – such as real estate, a business organization, or valuable possessions.
Who Is Most at Risk?
Those with professional licenses are most at risk. These include attorneys, physicians, dentists, real estate licensees, accountants, or anyone with a government sanctioned professional license to earn money. Why? Because your livelihood and earnings are contingent upon government approval.
In this sense, outsiders can push claims against you knowing that your license, and thus earnings are at risk. If you hold a professional license, you are vulnerable. Yes, you can hire defenders of the law to fight on your behalf. Even better is keep financial assets safely out of reach.
If you currently own a corporation, an LLC or any partnership you have exposure because it is registered with the Secretary of State.
Those organization have state compliance regulations. You need to comply or risk personal liability to lawsuits and tax audits.
Rather than using a professional corporation, consider upgrading to a Business Trust. You only need file a DBA to the state licensing board.
Reduced your exposure to identify theft with privacy. Targets with visible and valuable corporation or LLC assets such as as real estate are prime theft and fraud. Thieves can easily match up public information at the Secretary of State and County Recorder. Think of yourself as “low hanging ripe fruit.”
Asset Protection Trusts
Several states now offer asset protection trusts (APT) by statute. If you follow their rules, you can protect your assets from virtually any type of creditor attack. Typically there is a minimum 24 month safety period requirement. Yet there are ways these trusts fail to deliver.
For example, if you reside outside of the APT state, or your physical assets are located outside that state. Because in those cases, the rules of law in your personal domicile or that of a subject asset take priority.
If the federal magistrate or plaintiff’s attorney hear the words “asset protection,” you’re toast. Be very careful. They might not get your trust, but they could get the asset. One example is your real estate outside the APT state. A judgment lien could attach to the property. And the creditor might serve to enforce the judgment against your APT trustee. Read the rules and know where you stand.
Remember that when others “see” you have registered asset protection trusts discovered online, they know you have assets. Much easier and less stressful is an unlisted private trust. Save yourself money, time and hassles. Don't even let the lawyers find anything you own.
Nearly everything you possess of value is on the internet, especially real estate. Recognize that asset privacy is your best peace of mind. Hedge risk with trusts.