What is Real Asset Protection?

Hi, Mark Kohler here with another tax and legal tip, talking about asset protection. What is real asset protection? Now, I just had a phone call today. I meet with clients all over the country every day. We have five attorneys in our office doing real consults, answering questions about asset protection and implementing those strategies. And we get this question all the time. Oh, I need an llc. I need asset protection. Well, that's maybe not real asset protection when you get down to the nuts and bolts. So let's go over it. So let's use that LLC as an example. A lot of people say, oh, I need asset protection. I'll set up my llc. So here's your LLC and a couple rental properties. And they think, oh, I've done it. I've created asset protection. Well, let's back up here, too, first, because some people call me up and they're like, oh, I went to the seminar and they told me I got to have my entity and set up in Nevada or Delaware, a whole other video. Please watch that one in my playlist. But they'll say, I need asset protection. I'll say, tell me about your assets. Well, I'm living in a van down by the river. Well, you don't need asset protection. You need to go make money. Oh, well, I thought I had to have asset protection first. No, you're okay. No one really is coming after you right now. You don't have anything to get, so go out and make some money. And I don't mean that to be rude to any of you that are thinking about asset protection, but if you don't have a lot of assets, then let's not stress about it right off the bat. So. So I'll say, what are your assets? And they'll go, oh, well, I have a couple rental properties. Okay, this is what I mean by assets. Oh, I've got a collector's car over here. I have this other car paid for, that's really, really nice. Or I've got some investment accounts, or I have an IRA or a 401k, or I own a home, or I have a vacation home, or I have some land that my grandma left me. Okay, those are assets. And the more of these assets you have, the more protection we need to do. So where does that protection start? Now, using the LLC as an example, there is asset protection with an llc, but what really, what are you protecting here? Well, what you're protecting is you from a problem with your rentals, right? If something goes wrong here, they can't sue you. Puching. You're Protected corporate veil. I love LLCs. And you're protected. But did you really protect your assets? Yeah. You protected these assets from something that could go wrong. If you inside your rental property, you've got this barrier. But what happens if you're driving down the road, you're texting and driving, and I know you do it, you're texting and driving and you kill someone, and now there's a cause of action, a lawsuit against you. Can they get inside your LLC and take away your rentals? In most states they can. And you say, mark, I set up an LLC to protect my rentals. No, no, you set up an LLC to protect you from the rentals. Without additional planning. We're not protecting the rentals from you. See, this is inside. This is inside. This is outside protection. And I want to make sure that you have protection for your rentals from outside liabilities and protection for you from inside liability that could happen inside your llc. This is the real asset protection I'm talking about. We want to find out where your assets are and create a barrier. So if someone comes after you, we might want to put your home in a certain type of irrevocable or domestic asset protection trust. Adapt for another word. We might want to put your second home or cabin or ranch or land in maybe some type of entity that gives you outside protection. And then IRAs and 401ks, they have natural protection that comes with them. You want to know what the rules are there. And homestead protection with your primary residence. That could be a big deal depending on the state you live in or tenancy by the entirety. See, there's all these little asset protection techniques that they, that a good planner will tailor to you. Be careful setting up an elaborate structure of llc, thinking you're getting asset protection when you got a couple little meth labs as rental properties. Right? Let's. Let's not overdo it with structures. Let's tailor our asset protection to the assets and figure out where our liabilities may be coming from. It could even be a teenage driver. Right? Or a profession where you're working on someone on an operating table. I don't know. So be careful. When someone's selling asset protection and they don't ask what are your assets and what are your liability risks. An asset protection plan should be tailored to you. Watch out for these big flat fees, 5,000, 10,000 here. And come to our boot camp in Vegas. That's not asset protection. Get a second opinion. At our law firm, we have attorneys helping clients every day with a real one on one consult for a half hour to an hour. Pay for an hour to make sure you don't spend thousands on an asset protection plan that's all fluff and it's not tailored to you. Thanks for watching and if you love that video I've got a lot more. Please subscribe to my channel and I shoot weekly videos that can help you in your business, personal life and better live your American dream. Also check out my newsletter free newsletter every week with blog articles, tips, strategies, tax deadlines. You'd love it. Also if you like social media post please follow me on social media with some daily tips and if you like to connect that way it could be a lot of fun. But finally please check out my tax and legal Library. I have 50 plus videos on these topics and more where I pull out a whiteboard and break them down. Hours and hours of helpful information that can better help you live the American dream.