Protect Your Life's Work! | The Basics..

Well, today is about the basics. The how do I get started with asset protection? It's a. It's an area fraught with a lot of misinformation. Yeah, I'll have meetings with clients that are worth millions, and I'm like, are you doing this? No, that's basic. That's number one. They're like, they're paying for this elaborate structure, and they're leaving the front door unlocked.

Also, I think areas of risk, too. Contractors, you know, very common, that have. Can have some risk and see some lawsuits, people fixing and flipping properties. If you've done a lot of properties, you're inevitably going to have a lawsuit somewhere. Some contractor, some unhappy person that buys the place.

Employees, period.

Yeah, the more employees you have, the more risk.

Welcome, everybody, to this week's episode of the Main Street Business Podcast. Mark Kohler here with the amazing Matt Sorenson.

Yeah, baby, I'm here.

That was your cue. Okay, we're going to have a. We got to get some signals down, you know, like sort of hand signal.

I don't know how to run with it when you throw it to me like that. Am I ready for the topic yet, or are we still on? Intro of the podcast. Where am I at?

You know, Tom Hanks and Private Ryan, they had the hand signals. They knew what they were doing. Yeah, we need to definitely implement that. Well, today is about the basics. The how do I get started with asset protection? It's a. It's an area fraught with a lot of misinformation. Yeah.

Fraught with a lot of information. Misinformation and overkill. Also, by the way, that's a great song. I forget the band who sings overkill, but anyways, great song, but overkill, because some people go too far and they create expensive maintenance costs, ridiculous tax return requirements, and they didn't need it. So we want to go over the 101. What do you need to know? If you're a business owner, you own real estate, you own a home, you got a retirement account. We just want to hit those areas so you know how your assets are protected in the event of an unfortunate lawsuit.

And the thing here is, young or old, rich or poor, I'll have meetings with clients that are worth millions. And I'm like, are you doing this? No, that's basic. That's number one. They're like, they're paying for this elaborate structure, and they're leaving the front door unlocked. You know, it's like. It's just kind of the weird thing, you know, and so we Want to make sure you're maintaining your entities. We've got some good basics here, and nine times out of ten, they're either cheap, affordable, or free.

Yeah, Yeah. A lot of stuff you can do on your own. Some. You might want a little consult with one of the lawyers at the amazing kqs. Lawyers. We'd love to help you out. So let's get started. I think anytime you start asset protection, we got to start with risk.

Yes.

What risks do you have? We all have different risks. If you own a business, you've got a little set of risks. You've got some customers. If you own real estate, you've got some risks. And you've also got an asset, you've got a tenant, and you've got a property. So let's think of your risks. Everybody's a little unique there.

And I break it into two types of risk. Are you creating risk and. Or do you have assets that are at risk? Like there are two different things.

Ooh, got it.

Yeah. Right, Right. So for example, are you creating risk? Do you have a bungee jumping school, a skydiving school? Are you an OB gyn? Are you testing dynamite? Are you running fireworks in the summer? Okay, those are risky. You might kill someone or hurt someone, vice versa. Someone at home selling on ebay as an affiliate for Amazon and working in their underwear. Not creating a lot of risk. Not too worried about you creating risk. Now, the person at home to be more wealthy than the bungee jumping school. And that's risk number two. Because if you've got a lot of assets. Yeah. It may not matter how much risk you're creating.

Yeah. And I think I love all the examples there on the risky businesses, so to speak.

You know, I mean, you could be in college running a brothel out of your parents home.

Yeah. Tom Cruise with sunglasses, you know, whitey tighties, no pants, you know, whatever, whatever. You know, whatever risky business you have. But also I think areas of risk too. I think contractors, you know, very common, that can have some risk and see some lawsuits. People fixing and flipping properties. If you've done a lot of properties, you're inevitably gonna have a lawsuit somewhere. Some contractor, some unhappy person that buys the place.

Employees, period.

Yeah. The more employees you have, the more risk. You business partners too. Okay.

Profile.

Your business partners are the person, you know. Ticking time bomb over here.

I know. We need to order a risk analysis on Matt Sorensen, that's for sure. I mean.

Yeah, we had to up insurance.

You know, Matt's been golfing way too much. I'M afraid of those golf balls flying all over the freeway. I mean, I'm gonna get sucked into a lawsuit there in a heartbeat. Okay, now risky now, if you have assets at risk, when a client walks in and they go, hey, I need asset protection, I'm like, oh my gosh, how many assets do you have? I've got a Gremlin from 1972. Did you see Stranger Things with Ryanona Ryder? I've got her car.

That might actually be worse than that. Fair enough, fair example.

I know that's. But you gotta find out what your POS car is. A POS car? Yeah, they've got a Monte Carlo. Those are never gonna be worth anything. But if you have assets like rental properties, you're a lot of home equity. You've got some big money and some savings accounts, some crypto, some stock, a business of value. Okay, we gotta talk. But so we're looking for that matrix and I've created some matrix in my training for my certified advisors where, okay, if you're. You got a lot of assets and, or you got a lot of risk, we're doing some planning and we've got different levels. Everybody can do level one, but anyway, that's the first thing. Risk.

Yeah. And I think when you look at assets that may be at risk, different assets have different asset protection strategies and techniques. For example, retirement accounts have some inherent asset protection in them. In and of itself. You don't even have to do anything. You just have it. We'll talk about that for a moment. Your rental property mark talked about equity. Well, I might want from the thinking of the asset itself, if there's no equity in the rental property, there's really nothing to protect. Now I want to protect myself from a tenant still suing me. Maybe I want an llc. We'll get to that. But so this gets a little specific to your situation. That's why asset protection is not cookie cutter. It's not one size fits all. It's unique to your situation. The assets you have and the risk you have.

Okay, I love that.

I love that.

Okay, so yeah, we're moving forward. So point number one, I wanted to provide some summaries here so no one gets. It can be an overwhelming topic. Number one, ask yourself, do I have a risky lifestyle or a business with some risk that I need to guard my assets against? Number two, do you have a lot of assets? What asset needs to be protected? A retirement account does. May not need any asset protection at all. It already comes with built in asset protection. Think OJ Simpson 401K. Now, the next topic is. So you're going to assess your risk. Number two, we need you to understand what asset protection really is. And I'm going to get this is a quote out of my book as right here on one of my PowerPoints. Now here, hear me carefully. The goal of asset protection is to create as many barriers as necessary. Not just a bunch of barriers. Don't go over the top. As many barriers as necessary to avoid a lawsuit or facilitate a settlement. Asset protection is not about a bulletproof, you're never going to get sued thing. You can get sued all the time. It's not about hiding. It's about creating barriers to keep people away from wanting to sue you because they can if they want, but you want to make it expensive and a pain in the butt. Or number two, if they do sue you, they're like, this is going to be a lot of work to get at that asset. Let's talk settlement. And so asset protection is not about preventing the lawsuit or stopping it. It's from maybe avoiding it or creating a settlement. What are your thoughts on that?

Yeah, I mean, some ways, some asset protection tools are a barrier. They're not getting through. Like it was like the bulletproof vest. Some of them are. Like some bullets can get through, depending on what they are, where the vest was placed. And you know, and run this analogy too far, but, so, so you got, you got to know that, you got to know what, what it is on the assets. And I want to hit in today's show, at least the four main assets people have that are part of their wealth. Every American, you know, or not every American, 90%, whatever Americans, their wealth is in one of these four buckets. Your home, your business, which could be your side hustle, main hustle, whatever. Rental property and your retirement accounts.

I like that.

Well, at least hit those four.

Okay, I like it now. Next concept, just quickly before then we can, I like that. Then we can break those down. Number one, you assess your risk. Number two, you understand that there's not going to be a silver bullet. One step, push a button, buy this, and I'm done. You're going to create barriers, some simple, some more expensive. And then number three, when do I do asset protection? It's before the cause of action arises. You can't, heaven forbid, get in a car accident tomorrow morning on the way to work, and they go, oop, it's time to do asset protection. And you call our office and go, I just got in a car accident. I need to Hide all my assets. I need to put them in barrier. Do they know? It's called the Fraudulent Transfer act and it says, we don't care when the lawsuit started. We care when the cause of action arose. And think about it for you, is it fair to you? Someone plows through a crosswalk and hits one of your family members, and then they ran out the next day and put all their assets and structures. Would you be okay with that?

No.

So the sword cuts both ways. But those people that want to do some advanced planning and take the time to do a little extra asset protection planning, create some barriers before the car accident, you're rewarded for that because you've been proactive in the asset protection. So be careful thinking you can do it after the fact.

Yeah. Let me give a classic example. This is a case I actually had. We had a client that was a private hard money lender loaned to other real estate investors on properties. He loaned 100 grand or so to some other real estate investor. This real estate investor defaulted, sold the property, didn't pay him back. Some issue with the lien and not getting it done in time, didn't get paid back. But we sued her. This is back when I did some litigation a little bit.

You were a fighter.

Yeah, we sued her, but got a judgment against her because she owed the

money, didn't pay it back.

It's like, I mean, you know, you still gotta file the paperwork. It's a pain to get through the process, but we got the judgment. Well, we went and looked up all of her properties because she was an active real estate investor, transferred all of them to her kids. We walk into court with the judge in what's called a supplemental proceedings hearing. We say, hey, we have this judgment against her. On this note, she defaulted on years ago. By now, you know, it was like two or three years later, and we're coming to collect on our assets, and she transferred them all to her kid's name. Let me just tell you, the judge ripped her a new one. We got paid within like 48 hours on that judgment. Okay. I love it because, like, it's the Fraudulent Transfer act, what we're talking about right here. So don't think you can do all this. I'll just move all this stuff around when, you know, the proverbial shiz hits the fan. No, no, no, no. You got to have all the pieces in place above for any cause of action or liability arises.

All right, now can we still. With a couple other general principles. Okay. Okay.

Now the.

The next general principle. I Like to teach. It's a theme in my book is there's levels of asset protection. I think that's an important concept. You can say I'm a level one guy. I don't, I've got assets, but I'm not a multimillionaire or I have a little risk, but I'm not out there with a bungee jumping school, whatever. And so you say, I'm going to do my level, then you can upgrade when the time's right. A lot of people think it's an all or nothing proposition. I'm gonna do asset protection. I better write a check. I gotta go see a lawyer. It's gonna be up the butt. No, it's not. You can do a level one or a level two. You got all sorts of options. And a lot of it, again, can be self help, self guided, or very affordable delegated services. So that's the next point, the last one I wanna make here. If we could. And then we can jump into level one and maybe start with the home. Cause there's some level one things with the home is keep in mind privacy is not asset protection. A bulletproof vest is different than camouflage. And a lot of people are like, well, I'll just hide everything. Well, anybody with a big enough scope, enough time on their hands, night vision maybe, yes, they're going to find you and then you have no asset protection. At the same token, you want to say, well, I'm going to just do asset protection and no camouflage. Well, now you're out there and you're an easy target to take shots at. They may not kill you, but they might hurt. So you're like, I'm going to combine the two. And that's where you can really exponentially, and sometimes very affordably take a level one strategy, add a little camouflage, a little privacy, and really get more bang for your buck.

I love that. Amen. I don't have anything to say in there. I was just trying to think like something about a grenade or something.

Do you own some camouflage? Do you have any camouflage? No, not really.

I don't have any.

You're more of an orange vest. You're like out shooting birds.

I want you to know I'm out there. Yeah.

He's like, I'm wearing an orange vest. I just don't want to get shot by that idiot out there about someone

else shooting me and the animal, you know, not.

Oh my gosh. Okay, so level one strategies. One of the first level one strategies, and a lot of this can be automatic, is how to protect your personal residence. What do you think? What are some good ones?

The first thing is, is we don't put a personal residence in an llc. You may want to do that for privacy and so that. But like, we're not using LLCs or entities for your home. Now, generally, we want your home owned by your trust for estate planning purposes. That's an estate planning reason, not an asset protection reason. Your trust for estate planning is not asset protected. You might have a domestic asset protection strap that says 202. It works in a few states, but so for most clients, even for myself, what we're doing is we're relying on a homestead exemption. Most states have a homestead exemption that says a certain amount of equity. Some states it's unlimited. Some states it's like 20 grand. But they provide a certain amount of equity in your home, cannot be attached by a creditor. So you own a home with 100,000 of equity in it. A creditor can't sue you, forced to sell the house and take all the equity out, even though they got a judgment against you. So that's called the homestead exemption.

So, and that's the easiest first thing you want to do. If you, if you say, I have a lot of equity in my home or I've just bought a home and I've got a little equity and I'm worried about a lawsuit, don't think LLC or hire a lawyer, the first thing to do is, what's the homestead exemption in my state? Is my home already protected? Now, in my tax and legal playbook, get on Amazon, Exhibit A is the homestead exemption table. And Matt, give me a state or two. I'll tell you what the homestead exemption is.

Florida.

Ooh, Florida.

I know that one. Unlimited, baby, unlimited.

So you could be a former NFL player caught up in a terrible lawsuit for killing your ex. Allegedly, allegedly. And have a huge judgment. And your home that you bought with some of your NFL proceeds could be in Florida and untouchable. Of course, I'm referring to the NFL O.J. simpson mini series, which is phenomenal on AMC. But the Florida homestead exemption means your home can never get taken in a lawsuit. And O.J. simpson was able to protect his home. Now, Florida did modify their the law. They were a little embarrassed by that because O.J. ran down there and bought the house and there was no seasoning or holding period. Now Florida's got a little more. There's a little more meat on it, on the bones they seem to get.

Like every CEO that gets fraud or company that goes under Floods there and goes and buys an expensive house thinking they won't get.

Yeah, I'll just rattle off a few, though. D.C. is unlimited. Iowa, Kansas, that means your home is unlimited. Protected to an unlimited amount. Oklahoma's unlimited.

I see a lot of states in there. 100 grand. 165. 50. Just. This is tax and legal playbook, by the way. There's. It's in the exhibits there. You got to get that book.

Yep. And I like it. I mean, Alabama, you get 15 grand, and it covers your mobile home, even if you do have a Trans Am up on blocks out front.

Oh, they threw in the Trans Am?

Yeah, they do. So, I mean, that's a nice feature. You know, you get the mobile lobby

in Arkansas for Trans Ams.

Yeah, yeah, I think I said Alabama.

Alabama.

But Arkansas. You know What? Arkansas is 2,500 bucks. 2,500 bucks. So if you get sued in Arkansas, any equity over 2,500 bucks, toast.

But you know what? 25, that's a nice place in Arkansas.

Oh, my gosh. We're getting hate mail. We're getting hate mail. Sorry, my Arkansas followers. Okay, now. Okay, we got to quickly do this because we can spend a whole day just on home. So I have a chapter on how to protect your home. Personal residence. Homestead exemption is the first one. We gave an example. Another one's called tenancy by the entirety, where if on title, you are married, there can be some protection because it's not fair to one spouse. The other spouse is an idiot. Most of the time that doesn't matter. But it does on the home. Third tenant is equity stripping, where you can maybe lean your home, pull some equity out that clouds the title. It could be a personal equity strip scenario. It could be a bona fide second mortgage with Wells Fargo. Whatever. The more legitimate, the more protection is going to offer. Whole other topic, too, but that's level one. You can just look at homestead exemption, tenancy by the entirety. I think actually put equity stripping in option two. I mean, in level two, because there's more work involved. Involved. But umbrella insurance and then the domestic Asset Protection Trust, those are going to be level two or three. So. But level one, find out what your homestead and your state allows for tendency by the entirety.

Yeah, and I love the equity stripping. You know, there's like a strip club joke in there.

So I know.

I was going to say you just

wanted to say the word strip club.

You know, just. Yeah, it's good stuff. In.

In.

In Vegas, there's got to be a club Called equity stripping. Yeah, but, but I like using an actual bank because typically when the bank, you can get a line of credit and they'll cloud title and they're usually going to put a lien on your property up to the line of credit amount, even if you don't draw on it. So, so that's nice because any plaintiff, if you do get in this unfortunate situation of a lawsuit, will look at the property and see, ooh, there's like two mortgages on this, you know, and, and they don't know whether you've drawn on it or not. So if they're assessing you whether you're collectible and we're suing, you don't look so hot.

Yeah, no, I love it. Great. Good call. And the other thing I wanted to point out here is don't get deceived that the revocable living trust of the trifecta provides asset protection. That's not its purpose. It's there for privacy. There's your camouflage. That's where the RLT comes in. And to protect you in an estate planning scenario where you pass away your spouse and you've got potential privacy and lawsuit issues with beneficiaries. So the revocable living trust is about privacy and estate planning. And keep that in mind. Don't think that's going to be the ticket. All right, so if we just stick with level one here again, keeping it simple, let me rattle off a couple others. One that's, we went through the automatic a little bit with the home. Why don't we check off this other one with retirement accounts.

All right, do the bookends.

Yeah, that's the bookends. I like that, wrote them here.

Retirement accounts. One of the amazing benefits, there's others on retirement accounts. Great tax strategies, of course, is the asset protection. So if you think of your 401 plan specifically first, here you have what's called ERISA creditor protection. And this is again, when you think about O.J. simpson, he's just the asset protection case, you know, example everyone can understand. Had his NFL pension, no one could touch it. Right. $30 million judgment against him from the Brown family, they couldn't touch it. Okay. Even the distributions and payments coming to them, not touchable. So but that's for all of us with our employer based 401k plans. Now for you with Solo KS and IRAs, those are based on state asset protection rules and credit protection rules.

But most states are pretty good.

Yeah, most states you're at least getting a million.

Okay.

At least a Million. In some states it's unlimited amount. But at least the only state that's a little quirky, of course. California. Oh no, California says your IRA is protected up to the amount that it would be necessary to take care of you or your dependents. So.

Well, in California, cost of living, that could be several million.

Right, that's true.

That would be my counter.

Yeah, yeah, that's true. So you gotta, that's, that's a, California's a little odd there, but basically think of your retirement accounts as creditor protected. Like you can file bankruptcy and keep your IRA and 401k. Like wipe out all these creditors and keep your IRA and 401k. That has millions of dollars.

The only people that are gonna. Yeah, the only people that are gonna touch your IRA or 401k is the IRS. They're not gonna mess around with it. Or if you go through a divorce, you're gonna have to split it up. Other than that, no creditor is gonna touch your 401k. Again, IRAs will be based on state law.

Let me this because I think like a lot of like physicians over the years, surgeons, people that are on this high risk side, when we talked about that, you know, they might be need level 2, level 3 type planning. Love maxing out retirement accounts not just because of the tax strategies, because they're high income, because they know they're setting aside this wealth to glow, to grow long term asset protected. I get a malpractice suit. I still can keep that.

Yeah, perfect. And now let's summarize here too. Everybody take a breath. Where are we at on this? Where to start with asset protection? Let's think about it. Let's say you've got home with some good equity in it and you've got an IRA and a 401k and you walk in our door and go, hey, I need asset protection. Say, do you have any rental properties? Nope. Okay. Do you have any other major assets outside of your retirement account or your home? No. And that's a big swath of America right there. They're W2, they got a 401k, an IRA and a home equity. Well, guess what, they may live in Texas where it's unlimited homestead exemption. Their IRA and 401k is generally untouchable up to significant amounts. And they don't have any other major risk. We're going to say enjoy life, go. There's no asset protection. Let's make sure your revocable living trust is done. Let's make sure there's some privacy from identity theft. But let's really, really just. You're done. So that's how it can be so affordable. Well, now we've got our two other options. We've got our business and rentals.

Yep.

Okay, so here's some other. I call Battlefield Strategies. Level two is more barricade, earthworks, trenches, you know, fences. They take more work. Yeah, they're. They take tunnels. The tunnels are cool. And then you get into the castle strategies, where I've got to really build something to protect the. This is kind of Lord of the Rings type. And like a dragon. I want a dragon in here. I want a dragon in the mix. They're good for asset protection. Okay. But Battlefield strategies are simple, cheap, and easy. So there's the analogy you're going to get in my book, too. We talked about the automatics Homestead retirement account. What are some other good ones? If you are out doing business, you do have a small business, you do have some rental properties. Well, number one, good contract practices. You're out there being careful. Sometimes we're our own worst enemy. It is shocking to me how many clients that have net worth and money and businesses are doing deals on handshakes. I go, do you have a contract for that partner or this. Is your LLC finished with your partner? No. Is this done? No. And they can care less about good paperwork. And then they wonder why they're in a lawsuit and they've got tons of exposure. It's because they're just. Just throwing caution to the wind, and it doesn't take a lot of money. So be careful going into agreements and contracts on a handshake. And that's basic 101.

Yeah. I love it.

Okay, number two on this list of kind of good basics is if you have a business, are you maintaining the llc? Incorporation? I mean, Matt, you're knee deep in this with Main Street.

Yeah, yeah. So the first thing, any of you that have business or business owners, right, we generally want you to have an entity.

Right.

Now, maybe this is a side hustle thing. You're making five, ten grand. Okay, don't stress about it yet. But if you have an active business with customers you're gonna be interacting with, I like to think about the. Think of the entity first here as being this kind of receptacle, if you will, of where the lawsuit's gonna get contained. If there's a liability that happens in the business, it's stuck in the business. It's not coming down to you personally. It's not getting into your home. It's not getting in your spouse's job or source of income. It's not getting your investment accounts. So we're going to use an entity typically I like an LLC or S Corporation. Okay. That's going to protect you.

That's the whole purpose of it.

Limited liability or the corporate veil. With a corporation, they can't come down and get at us personally. But the corporate veil can disappear if you don't maintain it. Okay, you set up the entity, you got the documents done, right? Hopefully on the front end. But did you renew it with the state? Did you do your annual minutes? Okay, are you keeping the bank account separate from your personal assets? So there's some active things you need to do, which we have a company compliance service as part of Main street business, and we've done in our law firm for years, too, where we help you maintain it and it's affordable. We file it and make sure it's active with the state. We do your minutes, and that is ensuring that this corporate val. Limited liability treatment of the entity is going to be there to protect you when a lawsuit arises.

And another kind of unpacking this is a lot of people think is, okay, I go online and I set up my llc. I'm done. I had my llc, so we're good. And we get, I think on Google and chats and bulletin boards, people get deceived into thinking, if I just have this llc, all of a sudden it's going to be my get out of jail free card. Well, does the LLC actually own the rental property? Are you doing these company maintenance things that Matt just mentioned? Are you respecting that corporate valor? Are you treating it like a real business? Because if you only have one sheet of paper from LegalZoom three years ago in a drawer somewhere, that's not a freaking llc. And you get into a lawsuit, the first thing the lawyer's going to do is say, you better go rebuild that and hope a judge doesn't ask for legit. That should have been kept. And they will. Because if you're going to hide behind this LLC like a barrier, if there's holes in it, it's not going to protect you. And like that analogy, I kind of just went from the barrier holes in it. So, anyway, so let's think about this. We talked about home want to protect your home equity. You want to make sure your retirement accounts are protected with your business. It's kind of unique. Your business is creating liability, but also your business might have value in it. And that's where it gets a little Trickier. Because now you have inside assets and you have outside assets, maybe your home and other investments. And so you want this barrier to be a protection where in some states it's providing two way protection, it's protecting what's inside the business. Think of a rental property and then it's also protecting you from the business on the outside. Think of a restaurant and you're like, well, the restaurant doesn't own anything, but it's creating liability. Oh, but my rental properties are valuable, but there's not a lot of liability in it. And so you're trying to protect that veil from the outside in one instance and you're trying to protect it from the inside in another instance. And so as you start to create entities, you've really got to understand that strategy. Yeah.

And for those of you are like, whoa, that was a little fast. We have a separate podcast episode on charging order protection entities that gets into that distinction there that Mark was talking about before. Like, you know, it's a whole podcast episode. But what I want to say on this is one on one with the business. And I'm thinking of like your operating business, you have, you're selling goods or services to customers. I'm talking about your rental yet. But this entity we generally wallet might have value to sell at some point. This business is not holding assets. There's cash in there. We don't want to hold cash. If something happens, they can sue that LLC or corporation and get what assets are in there, but they can't come down to you personally. So it's generating revenue, it's generating income, it's got cash flow in the business that's coming down to you. And this is where we do our trifecta strategy and planning and we move that wealth you're creating over into other assets that are separately asset protected. Because we don't want to accumulate assets in the operating business because they could be at risk there. So I just want to get that principle of moving the wealth from the business and the cash flow over to other assets in a separate entity.

I love it. And I think what's the last takeaway here? And that is hopefully we've given you some ideas of knowing that asset protection doesn't have to be expensive or overwhelming to just get started doing some basics and understanding what you have and is it protected automatically and considering a better plan of attack. And that's where level two comes in. And what I put on my list of Level 2 strategies is doing a trifecta. And that's where you can Get a consultation with one of the tax lawyers that can do an asset protection review. They could look at your structures, your entities, maybe set up an entity included with that review. And if any of you haven't done a trifecta or had a lawyer, kind of just look at your big picture, it can be extremely affordable. Under a couple grand we can give you a plan of attack of the kind of the holes in your asset protection, what you need to implement, and you could get an appointment within a couple weeks. There's not a long waiting list or anything like that. So that's level two, because once you get the trifecta, then you're going to see, all right, here's the picture and here's the holes. Here's the entities I have or don't have. Is my estate plan finished? Is it not? Do I have privacy exposure? And so that's where we can start getting into these higher level strategies of maybe some umbrella insurance, some equity, stripping these entities in a creative way.

Let me give a final tip on the rentals though, if I could. So we've thrown out LLC. Generally we like LLCs for rentals, but some of you might have multiple properties and there's Things called series LLCs in states you can use. Again, separate podcast episode just on that. But one thing to think about and one little tip here on the rentals is we want to look at how much equity you have. You could have 10 rentals and we're going to put them in the same LLC because there's only 10,000 of equity between each property. You got 100,000 at risk. Are we going to set up 10 LLCs? No, that's not worth the cost. I mean, we'd love to set them up, but you're going to be overpaying, you're going to be overdoing your asset protection. But if you have two properties with 300,000 of equity in each one, we're going to do two LLC. Now why is that if you've got 10 properties in one LLC, you get a lawsuit on property number four? Well, all their nine properties, the equity in them is at risk. Well, Matt, it's only 10,000 per property. It's not a lot. Okay, probably so plaintiff lawyer's not going to chase you down. There's not enough equity there. But if you're in the two properties scenario, there's own in the same LLC property one has a lawsuit against it. Well, you've got both eggs in the same basket. 600 grand of equity is now at risk. So generally we're looking at how much equity you have. Our rule of thumb is about 250 grand of equity or so. 200? 250. We like to set up separate LLCs. So if you've got a lot of equity in properties and multiple properties, you may be having multiple llc from an asset protection standpoint to kind of, you know, not have your eggs all in one basket.

Yeah, I just was going to say that's the analogy I really like. Think of baskets. LLCs as baskets, and think of your rental properties as eggs. Now, if there's not a lot of equity, they're little quail eggs, you know, and quail eggs, they're tasty. I mean, a pickled quail egg. At Buc EE's, they have a whole jar of those of Buc EE's.

I don't want to know.

Yeah, yeah, they do.

They're admirable. I'll take your word for that. Yeah, but.

But then you have big assets with some rentals, maybe ostrich eggs, they better have their own basket, you know, and now they don't do those in jars at Buc EE's. Ostrich eggs, I don't find even of those. But anyway, so be thinking of your rentals as eggs, your LLCs as baskets, and you want to make sure that basket is strong. It's getting taken care of. I'm beating these analogies up. You gotta take care of that thing.

It's like a double weave basket. Yes.

I take kids to Scout camp, and they're doing their underwater weaving, you know, for that. The basket weaving merit badge. Yeah, that is a merit badge.

Yeah, it is.

And. And it can be really challenging, you know, I want to say. But, you know, over the years, I've

mastered Scout Master Mark. You know, Mark's, you know, done many things. Scout Master. I've seen Mark in action as Scout Master, by the way. It was amazing. Yeah.

You know, fires, propane, tanks. I mean, it's guns.

Hey, record merit badges. When we did Scout camp.

Yeah, that's right.

These kids like. Like, oh, my gosh. They went home, their parents were like, leo, last ScoutMaster got you five merit badges. You came in with 15 merit badges.

And I'm like, I know. I was like, I don't want you coming back. Let's get your badges and get you out of here. Let's get your Eagle Scout. Get on your way. Go change the world. Well, everybody, this has hopefully been a great primer. Please, I encourage you to zero down in on some of our other podcasts on deeper asset protection topics. Daps, Copes Charitable Trusts. We've done a lot of different podcasts

where we do series LLCs.

Series LLCs, absolutely. Get a copy of my book over at Amazon. Matt's book as well is going to focus on the retirement plan issue. So if you want to talk about retirement plan investing, self directing and the protection in there too, Matt's book, my book as well are going to be both. Wonderful resources on your desk. Thank you for listening. Next week we should do open forum next week. Week.

Yeah, let's take, let's do some open forum next week. And if you need a consult, get over to kqslawyers.com we always say the law firm and presume you know what the heck we're talking about. But kqslawyers.com that's our team of lawyers, amazing team of attorneys there that can get into some of these asset protection issues but also coordinate with your tax planning because I'll say that as though my last point, you know, when law firm was in its early days, you know, Mark started I came in pretty early. One of the things we ran into was people had some great asset protection planning that was a tax nightmare.

Yeah.

Okay. So you want to coordinate that asset protection planning with your tax planning so that you're not hurting yourself by, you know, doing taking one step forward with asset protection and one step back by paying more taxes. So we want those two things to be in balance and have harmony.

And for those that are doing the certified tax advisor program over@markjcohler.com Module 10 is all about asset protection so that you as an advisor, whether you're a cpa, ea, financial advisor, attorney, you just want to know enough to identify the issues. That's a whole module in that training and it's incredible. People are loving it. So get over to markjkohler.com if you want to learn more about that. Thanks everybody. We'll see you next week. Post your questions@mainstreetbusinesspodcast.com and we will build questions next week and do the best we can. All of your NFL predictions we will affirm and point you in the right direction.

We'll do a Super bowl prediction. You want to make sure you listen so totally.

We'll be here for you. Fanduel thanks everyone.