How The Rich Make Their Assets Invisible

Welcome back everybody. Today I'm going to break down how you can make your assets invisible from potential creditors and those blood sucking lawyers, as many of the wealthy do. Ironically. I am a lawyer and a registered cpa, an author of multiple books on asset protection and privacy, but most importantly, a founder of a law firm that has helped thousands of clients around the country with asset protection. Many mistakenly believe they have asset protection and privacy until something happens that leaves them completely exposed to losing everything they've been working to create. Today, not only am I going to walk you through why asset protection and privacy is so important, but give you some actionable strategies to protect your hard earned assets. First, what is asset protection? Asset protection is simply implementing steps or strategies based on your situation to protect those financial assets you've worked so hard for. It could be equity in your home, it could be a business, it could be an investment, it could be raw land, something that you've worked so hard to create. We don't want to lose it to a potential creditor. That's what asset protection is all about. Now how do we couple this with privacy? Because really it's two different things. Think of it like a bulletproof vest and camouflage. Now which one would you choose? I don't know, right? It depends on the situation, but we'd really want both. A bulletproof vest is going to protect us once someone's coming after us. And the type of vest we have is going to depend maybe on the amount of ammo coming our way. And then a camouflage jacket is going to protect us from being seen that invisibility. And if we can combine the two, we're getting better asset protection. And why? Remember, our goal is, is to try to protect our hard earned assets and maintain control the entire time. I don't want to give up control, I just want to protect it and hide it to the best of my ability. Now when it comes to asset protection, there really are stages or levels and the more assets you have, the more riskier life you live. You can add more asset protection to your mix. But let's start with an example of simple medium and then kind of higher level planning and I'm going to explain later why each one of these could be devastating if you don't follow them. So let's go with a simple example. One of the ones I just love that so many business owners and investors miss is that you may already have an llc, you may already have a little corporation for your project. Are you maintaining it? When was the last time you had a board of directors Meeting or board of advisors meeting? Do you have a corporate book? Do you have an operating agreement and bylaws and minutes at all? All those basics? I know many business owners just have one sheet of paper from LegalZoom and think I'm good. No, you're not. I'll explain the problems that can happen later if you're not. But that's a simple thing. It doesn't cost a lot of money. You don't have to go pay a lawyer to do that. We have some company maintenance programs that are $200 to just maintain that for you. But you can even do it yourself. It's a simple level of asset protection that can make a huge difference in a potential lawsuit. Now, next level up, I like to understand what I'm doing. I like my business owners to understand the structure and how it all relates together. I call it the trifecta. And when I have a trifecta, I see how it all works together. Because good asset protection is this vest that now may incorporate a shield. You think of those, you know, cops that are on the lines of a big riot. They've got their bulletproof vests, but now they've incorporated some more pieces to that protection. Takes a little more work, but it could add a lot of value. And so a trifecta is integrating, is bringing it all together. Your tax planning, your asset protection and estate planning. And it can just make everything so much more strong. Now the third level is maybe, I don't know if it's Tony Stark and Iron man, because nothing is impenetrable potential lawsuit. But you know, think of something that's more full on body armor and that would be more advanced asset protection. In that level, we start incorporating what's called a charging order protection entity. Hope entity. It's an entity maybe in another state that provides some privacy. We'll come back to that. But it may provide another layer of protection. So now we're stacking on layers of entities in different states to give you better protection because you have more assets. Now I'm going to explain the problems that can occur if you don't go through those different levels as needed and talk about the why and the how in just a moment. But now let's pivot and go back to privacy and being invisible or a little harder to find. Or maybe your assets are a little harder to find. So what would be a basic level, affordable, simple stage in better privacy? Shredding paper. I know that sounds kind of weird, right? But it's actually a pretty simple thing to do. And that's not. Maybe put my credit card bill statement in the garbage. Maybe not put my stock brokerage statement that showed up in the mail in the garbage. There are people that will prey on dumpsters just to gather copies of checks or copies of statements so they can abscond your personal information and steal your identity. So what do you do? Shred paper? Easy, schmeasy. You've got a little shredder by your desk at home and you put important stuff in there to shred to protect your privacy. Right? That's level one. Doesn't even cost you anything. Just an extra little step. It can be kind of fun, too. Now, in privacy in my book, I've got 15 different things you can do at each level. And it gets pretty fun and exciting. It can almost get addictive. Creating a little more privacy in our life when we feel like we have Big brother always watching us or someone that's trying to steal our identity. Right? Let's go to level two. What are a couple other things you could do that maybe take a little more time and effort, maybe a little, you know, spending. And that would be going around your house, your property and doing a video, taking a video of all your belongings just on a random basis, maybe once a year. Just make a goal to do that because you might have an insurance claim. It could be an act of God, like a tornado. It could be a fire, it could be a theft, a break in. And you need to show improve. What do I own? Insurance companies. They don't rush to your side to always pay a claim. They're not that friendly. So don't think they're going to come running into the door and write you a big check. You got to prove what you freaking lost. So walk around your house sometime and shoot a video. Could be on your phone, for crying out loud. And then, you know, export it to a little flash drive or something because guess where you're going to put it? In a fireproof safe. You can get a fireproof safe at Target or Walmart for under 100 bucks. That's where your passport should go, your will, some of your important titles that you might have to property that's paid off, and a little flash drive of a video of what you own. And it's in a fireproof safe that if anything ever happened, boom, you've got it. Help me help you. Help me help you. Have you seen that Jerry Maguire? What you're doing is helping your lawyer, helping your insurance agent by documenting these things. That's level two. Now level Three. Oh, it gets even more fun. Sometimes. We don't want our name out there on public record. Have you ever googled your own name? Be careful. It can be scary. So as you start to accumulate more assets and more exposure, sometimes it's nice to sit back and go, you know what? I don't need everything I own out there on the Web. My address, my entities, my property. So level three, we start to create entities where your name may not be there, your home address may not be on there. We might start using a PO Box or a mail forwarding service, something we offer at our law firm. They go to look you up, they got to call my law firm. So level three is when we start to take you off the grid. To some degree, people do public searches when it comes to assets or going after property or entities. And your names all over these companies and properties, those become assets that a creditor might want to go after. So in keeping it simple here, we would want to use a mail forwarding address, a P.O. box, and we have that service at our law firm where you would use our address on anything on public record, and all mail would go through into a digital mailbox so that your personal home address is nowhere. Now, it takes a lot of work to get to that level where it's nowhere, but you can start doing some things to keep your home address off public record. And if you own property, we're going to set up entities that really don't show you as the owner or the manager, and your personal address is not tied to that entity. So that's more level three. You're just wanting to make sure your property and your businesses are private. If someone starts to go out on the web and look around, and again, there's all sorts of apps and other ways to create Internet privacy, just like I'm saying. Duckduckgo. So that would be level three, and we want to think about that. When we have more and more wealth and need more and more privacy. Now, why are we doing all this? We're doing all this because we work so hard to build wealth and build a future and build income and someone can come through and take it away like that. It's scary. Let's look at some of those examples again. So if we go back to the asset side, when I do corporate maintenance, when I maintain my LLC or my corporation and I get in a lawsuit, a judge wants to know if you respect your llc, if you really have an LLC or corporation, did you respect it? Did you have separate banking? Did you do your minutes do you have a corporate book? My first experience with this was when I was in college, and I had this guy that didn't pay me in my little business, many of you have heard my stories. I was a janitor for eight years, working my way through school, and this guy stiffed me for, like, three or four grand. And I was going to take him to court. I wanted my day in court. You know, I wanted my Judge Wapner Judge Judy moment. So I sued him. And when I got to court, he showed up. I'm not kidding with two lawyers. I think the fish story grows here. But he had. I know he had a lawyer. We get up there in front of the judge, and he's like, this kid can't sue me. I have an llc or I have a corporation. He had some entity. And he goes, he sued me personally. He can't touch me now. I was pre law, and I was in my senior year, ready to jump into law school, and I was so excited. And I had a professor that kind of helped me prep for this thing. And so I said, where's your entity? Do you have your corporate book? Do you have your minutes? Can we see your LLC or corporation? And the guy said, well, I have some of that stuff, but, you know, I filed with the state. I have my piece of paper. I'm a corporation. And I said to the judge, well, if he doesn't respect. Respect the corporate veil, why should we? He should be doing all this stuff. He's not doing it. And the judge said, you know What? You're right, Mr. Kohler. You win. It was pandemonium. There was press outside the. No, there wasn't. But I was so excited, and I freaking stuck it to this guy, and he ended up paying me out in the hallway because I pierced the corporate veil. Now, that's an example of just level one asset protection. That's just maintaining my freaking entity. So if I get sued, I can say, yeah, Judge, look, I'm standing behind my entity. I'm standing behind my llc. I maintained it. I respected it. Because if you don't, no one else will. So why are we doing all this again? Now, what was the example of level two? It was this trifecta having a picture. Let's go to the whiteboard. Let me show you what this looks like. This is a structure we build for all of our clients when they do a comprehensive consultation. And it shouldn't cost you more than 1500, $1600. So the trifecta is made up of three parts. Boom, boom, Boom. This is your revocable living trust. An important part I talk about all the time is the foundation. And your tax return is down here and over here. On the right side are your assets and on the left side is your operations. And so we want to structure your life to create a firewall between whatever you're doing in your day job, in your small business. We want to create a firewall so they can't get at your assets. So in your asset side we might have rental property and llc and we want to protect those rentals from other assets that you might have. So over here we're creating asset protection with an llc and over here we might have a Inc or an S Corp or an llc, who knows? And this is your small business. And so we're going to create more tax strategy over here, but also protection. And as we can incorporate tax strategy, your estate plan and asset protection. People, we just made you almost indestructible because now we're bringing the whole structure together. Does that make sense? It's not even that complicated. We got a trust, we've got our operations and we've got our assets. Now it can evolve, it can change and it's going to grow. But that simple picture creates a level two of strategy because we're coordinating things. It's like you're weaving a tapestry. And something that's woven together is going to be stronger than just one piece of paper. We want to weave it together. That's the trifecta. Now level three was another advanced strategy. We won't dive into the details, but these charging order protection entities are that next level where I might set up an entity to own own all the other things I have. Let's go to the trifecta, for example. So when we build that trifecta out, we might create a holding company. This would be a cope. And this holding company creates two, two way protection. Now they can't get out of the entity and come towards me and they can't get into the entity and it owns everything else. It may own a lot of other assets and structures and investments and crypto and stock and who knows what. But this COPE is an extra entity of asset protection. That's next level. And we may not need that next entity until we're at a level of more assets. So in summary, why are we doing all this? To protect the rental property, to protect our home, to protect getting our wages garnished, to protect all of the hard work we've been doing to build wealth. We want to stop some creditor that wants to come after us in some potential lawsuit or again, a natural disaster, some terrible thing that happens that we were prepared for. I want you prepared. Now let's go back over to privacy, because remember, we want to bring the vest or this body armor in combination with some hiding, some privacy that camouflage. And if I can go from a camouflage jacket up to maybe some sort of invisible predator suit, you know, I don't know. The more privacy you need, we'll build it out. Right? So what was level one? Shredding paper. Right. We don't need our personal information getting stolen from a garbage can somewhere. Let's be a little more private. And then number two, creating that video and having a fireproof safe somewhere in our home. And it doesn't need to be that elaborate either. That fireproof safe could be in the closet in the corner, just somewhere that if you've got a disaster that occurs or a travesty or something really bad, you can go after those important documents and know that they're not just sitting in a drawer for someone to steal or for a fire to take away or a flood or who knows what. That's why we do that. Next level now, the third level, man, we want to start taking our name off the public record and the grid. It kind of just keeps good, honest people honest, you know what I mean? If all of your stuff's out there, even honest people can be tempted. But we don't want it out there. We want to create this third layer sometimes for clients where it's really hard to find out what they own. You want to disappear? I'll help you disappear. Now, it takes more work, takes a little more money, and it takes some planning, but you can get there. Now, how do you do all this? It's getting a professional to help guide you through it that you trust and believe in. It's watching videos like this. It's just learning. I've got a podcast, I've got my books, I've got ongoing videos. Just start following the things I'm talking about. I'm not going to try and lead you astray. I'm not going to try to sell something you don't need. There's these companies out there just sell one thing to everybody, and they use fear tactics, and it's just not right. This industry of asset protection can get really dirty. So I'd like you to just start with the baby steps. Easy, basic things you can do that don't cost a lot of money. Start learning and studying and following me on these things. And when you're ready, and some of you are already ready for this, get a consultation with one of the lawyers in my firm again, 1500 to 2 grand, boom, you got a plan. You got a plan that you can start to implement tomorrow. It doesn't have to be expensive. And you can start adding the asset protection and the privacy as you need it and as you grow and as you evolve and how you maintain it. It's just a consult once a year. Now. Some that have a lot going on may say, well, I need a couple consults during the year and I got a lot of moving parts and I'm buying property and I'm doing okay, I get it. But it's just like going to the dentist. Sometimes you got to put on the braces, right? Gotta go to the orthodontist, kind of set it straight, and then you can maintain it. You go back once a year, you get the rubber bands adjusted, whatever, I don't know. Never had braces, thank heavens. But you're going to the dentist, you're going to the orthodontist on a regular basis to maintain. And it doesn't have to be super expensive. I'm telling you, if someone's trying to sell you some asset protection plan of 5, 10, 15, or 20,000, I've seen scary numbers out there. I don't care if you're worth $10 million, you don't need to spend that much. I mean it. Get a second opinion from one of the lawyers at my firm. We've been around 15 plus years and we love our Main street clients from around the country. Just get a second opinion at the very least. What do you got to lose? So in summary, asset protection, privacy, it is something that every American needs because we're trying to build wealth. We want to feel safe. We want to feel like we control our assets and we want to build. And if we're going to do that, we may want to have a, we may have a plan to protect all of that hard work. And that's what privacy and asset protection is about. And it doesn't have to be a mystery, and it doesn't have to be expensive. You can do this. Now you know the exact strategy and the steps you need to take to move forward with better asset protection and privacy in your life. You can move forward with confidence. The wealth you're building can be protected and you can sleep more. Rest assured that someone may not be stealing your assets or your identity in the middle of the night. Now, if you're still unsure that you're not doing enough to protect your assets and create more privacy. Watch this next video on why the wealthy put everything they own into a trust.