Author: Lane

More legal info – SimplePassiveCashflow.com/legal

0:00
This week’s show we’re going to be discussing overseas trusts pretty much the bazooka version of asset protection Now a lot of you guys have been calling me and you know I’m totally fine taking the shorter introduction tragic calls for you guys for signing up for the cuido pipeline club sign up for that it’s simple passive cash flow calm slash club but a common question that comes up as a you know, I’ve got a property here to my net worth is under $500,000 ROI i do i do these LLC fees and series LLC and all that’s fine. But once you get above a million dollars network, you’re going to want something different and quite frankly, those LLC and series LLC ideas, there’s a little bit of kitty stuff and they work in theory, and they’re not entirely foolproof, I think is fine. I’m not giving any legal advice here. But if your net worth is under half a million or even half even a million honestly you don’t really have much to lose and oftentimes the best defense for a lawsuit is being broke and then not having too much of a price to go after. So today’s podcast is again talking about overseas dress, it’s going to be also in webinar version. So if you guys haven’t checked out the YouTube version, sign up there and click the bell to subscribe and you get signed up for quarterly prize there. But you also get to check out the slides that came along with this recording. So if you guys are interested in implementing the strategy yourself, it is very expensive. And look, if you’re not a million dollar net worth guy, it ain’t for you. But I think that a lot of people are going to be heading in that direction. I mean, most of my you guys, my investors, you guys are able to save $30,000 after your day job and all your expenses and a lot of you guys are able to see 50 or $100,000 every year so in just in a matter of a years will be over a million dollars off to the next four and a half million dollar milestone which everybody talks about. And this type of asset protection is exactly what you’re probably looking for. And in fact, this is sort of a strategy that I use today for myself being out in the spotlight and being at a pedestal to be taking pawn shots of frivolous lawsuits. So enjoy the show. And you guys have any questions or serious about getting this type of asset protection shoot me an email plain and simple passive cash flow calm and we’ll see you guys later. This is a story about a dude named Lane he moved to the mainland and bought one place to stay. And then one day he went try to rent them out. And then he became one real investor may

2:22
want to introduce Doug and Brian once you guys say hi and introduce yourselves and we’ll get

2:27
Brian.

2:28
Hi, my name is Douglas ludmilla. And I’m the founding Managing Partner log more log Mel and we do nothing with asset protection. So as all I’ve done for 20 plus years is helped people protect their assets. So work with tons of real estate investors like yourself, as well as every other imaginable specialty in the profession that you can think of. I work with Brian and together we’re going to just talk about asset protection and Lane asked us to kind of start with LLC because that’s a big thing. And we do use LLC They’re very functional in our system. The question is, is, you know, is that enough? Can I just use an LLC? So Brian a

3:06
little bit about that. I’ll jump into that. And I’m Brian Bradley, and I’m licensed all over the state. And I got into asset protection as a trial lawyer on the litigation side, I look at it as what actually happens in court. And so that’s why I like setting up things that actually aren’t maybe protection and is really strong protection, which is what we’re going to be talking about today, especially for you investors, or if you’re credited have that 1 million net worth for a little bit more. This is kind of where what we’re talking about for you guys, first, thanks for putting this all together. And I appreciate that letting us talk to your group, you want to lead off about what’s going on with LLCs why they’re weak. They’re a good starting point. But what is it that’s wrong with them, what’s missing with them and so as Doug said, the LLC or limited liability companies, it’s a good entry point to establish some basic form of protection dog and I we both use them and then as clients grow those level of protection then grows as you grow. So you need something that grows with you on an This is kind of like the adage where you starts not where you’re going to end up the same thing with LLCs. As you grow, what’s going to happen, you’re going to add another LLC, another LLC, another LLC, that’s just going to start creating a massive mess. But you also need to understand a lot of the pros and cons. There’s weaknesses to everything. And generally, I think what most people hear is just the pros about LLCs, but not understand about how they actually function. And so LLC say it right in their name. They’re limited. They don’t hide the fact that they have this limited protection, but they’re affordable, and you’re going to get some limited personal liability out of them. A weakness is that its protection, or it’s what’s called a veil can be pierced. I’m sure most of you are familiar with this term piercing the corporate veil, and you have a lot of unfriendly states like California, New York and a lot of other ones that do not like to honor that limited liability protection, and they’re easy to pierce and then depending on the state of the jurisdiction, you can either have really strong charging orders are horrible August and so what a charging order is referring to is how much a creditor can actually collect from you, the member who owns that LLC. And so good state charging orders are going to have the charging order being the sole remedy basically that saying that a creditor with a judgment against the member you the owner is going to be entitled only to that limited remedy or that charging order. That’s it. But LLCs have limitations and drawbacks, you know, states have started differentiating between themselves and just how serious they’re going to take asset protection like California, they’re basically turn non asset protection friendly states and same in New York and a lot of other states. So if you’re really interested in true protection, it’s important to understand what these limitations are, and what are some of the solutions around them that we provide. And so as case laws developed over the decades, we’re seeing courses completely disregard the charging or only remedy and then directly reached LLC assets, whatever assets you put into those LLC is that you’re thinking you’re protecting courts are just piercing straight through them, and then letting those assets be reached by creditors. And this is becoming really common. It’s just called piercing the corporate veil.

5:58
Maybe you can do a little example On this, we all think we’re getting tricky here by using these Nevada or Wyoming or Delaware LLC, but may be explained it doesn’t really protect here that charging order protection or how you can pierce that. And now you’re charging order protection. Yeah, Doug will

6:13
hit that on a deeper level later on mutation. But a lot of these are created state statutorily first state residents. And so you’re having a lot of out of state residents using will just use California as an example using Nevada asset protection trust, or California using Delaware or Texas or Nevada LLC. And the course is saying, well, your assets are here in California, you’re being sued here in California, why do I care that you created something in another state, the tort laws that are going to be applied are going to be applied in the state where you’re being sued anyways, so they just completely disregard those entities. And that’s one of the major weaknesses and we’ll get into a little bit more detail of that in the presentation as we start going through domestic first offshore and then I can break down some of the case law with dog on that just to show you know, like we’re not just making this up. And one

6:58
thing if I shut up again, And this is for accredited investors and above. And especially if you’re in a high risk profession like a doctor, you got a lot of liability. I am personally very terrible at keeping bank accounts and credit cards straight. I think it’s a complete waste of time for me to worry about that. So that’s why I like something like this. And someone had set up something previously very similar to what this is, but there’s a little bit of issues with it, maybe you guys will go into it, but kind of what I’m doing to kind of protect myself again, I’m the general partner and all my deals so my butt is kind of out there. And I’m obviously very public facing so this is what I’m doing. It may not be for you but like how Brian saying you’ll grow into this as your network gets one 2 billion and above.

7:42
And I’ll piggyback off of that even as it’s even stage double because I don’t want you to scare away a lot of your members to where let’s say they just need an LLC but at the end of this like Oh hey, I really want to grow into this later on. You start a new skill in LLC asset management, limited partnership that then goes into it and the bridge trust later on. Which would touch upon how to skills out later on. So we don’t need to scare away everybody. So to get back to the you know, the LLC, it’s just you have single member LLC exemptions, and that’s become a major concern. Some states like California shown just a consistent propensity to be hell bent on disregarding them and they’re just a determined to pierce all of your LLC. So the LLC is a good starting point. I don’t want to scare people away, it gets property out of your name, we use them you last thing you want to do is own anything personally. But what’s missing is the full strength that you really want and that we’re going to be talking about today, you know, like the offshore asset protection component to it when you get to that million dollar net worth more. And so we’re going to break this down for you more and Doug’s going to jump in with our slide presentation. I’m just going to interject here in there.

8:47
Have you ever listened to a podcast or been in a seminar and too afraid to ask a slightly personal question? Our mastermind will have an intimate seal where people are going through the program together and at their own pace if needed, in order The foster friendships when I was learning and paying thousands of dollars for masterminds and mentorships the network. However, hokey pokey and sounds was a big part of it. What happens in the mastermind stays in the mastermind. We’ll use the BI weekly webinars sessions to the set concepts with real life examples. here how someone else might implement something like infinite banking concept on a hot seat session. Our group will attract thought leaders to meet just with our exclusive group, we can get FaceTime and ask individual questions. Why? Because our group will be people who put their money where their mouth is go out and make things happen as opposed to your local Rei Club, which is traditionally just a bunch of tire kickers and some sharks. Simple passive cash flow calm, backslash journey to learn more.

9:51
Okay, great. Well, LLC, they’re great and they’re definitely the first step just like anything else. They’re just limited in their ability to take you all the way So really the question is, what do we do after you’ve got your LLC? Well, from there, we look at a tool called an asset management, limited partnership, you can think of this as a holding company, this is where your LLC goes. So in your current model, if you just have LLCs, and you’re the member, that’s where the breakdown occurs in this model, you’re going to actually have a holding company that’s the member. So it’s going to hold your LLC interests, whether you own 100% of the LLC, whether you own 10% whether you own 1%, it doesn’t matter whatever percentage you all make and hold other companies that can hold stock cash, any kind of securitized assets. And here we get a choice because Brian made a really good point. If you have real estate in California and you created Nevada LLC thinking, Oh, I’m going to get all this great Nevada protection and then you put California real estate in it. We can absolutely tell you for sure a California Court is not going to apply in Nevada law because it’s holding California real estate. This changes though when we use a holding company because the holding company is not in California doing business. It’s whatever state included if we use Arizona, there’s only has great charging or protection. It’s statutorily The only exclusive remedy in Arizona, so they do not break into limited partnerships and foreclose on the underlying assets, you can include your family member in the holding company, you can include your kids, your spouse, if you have partners that you work with, it’s a great way to create a family asset. And if you want, we can actually make this private. You don’t need it to be private, but it’s easy to make private if you want it to be private. So it’s very difficult for someone to look up what you hold after that. That’s when we look at the asset protection trust. And don’t worry, I’m going to go back into this in more detail. But at a high level, this is where we are taking the assets and creating the capacity to move them literally out of the country if necessary. And Brian mentioned that this is basically at a million dollars worth of net worth in protectable assets whether it’s limited partners of interest, direct real estate that you own your primary residence Cash stocks, whatever it is, once it adds up to a million bucks, we start looking at the asset protection trust, it’s not limited to any specific type of risk. It’s just protect the asset. And again, privacy, I really want to talk about the asset protection trust because this is the thing that there’s a lot of misunderstanding, confusion and misinformation on the internet about so what is it really simply, it’s called a self settled spendthrift trust. All that means is that you creating it for yourself, and you’re putting Spencer provisions in it and what a spendthrift provision is and the provisions that exempt those assets from a creditor says, Hey, if a creditor is trying to reach these assets don’t give them so there’s two ways or two schools of thought in this you can do as an asset protection trust internationally, or you can do it domestically. Talking about both the international options was created first created in 1984, so over 36 years ago, so long time, it has statutory non recognition of any other countries court order or judicial proceedings. Which means if you get a judgment against you here in the United States, and you take it down to the Cook Islands, it’s literally worth nothing down, you have to start all over again, you have to prove your case beyond a reasonable doubt, which, as we all know, is very, very difficult to do. There’s no continued fees down there. Unlike here where every plaintiff’s attorney works for the action. That’s, that’s totally prohibited. You’re not allowed to do that. Once upon a time in this country, it was also considered unethical, terrible Trial Lawyers got ahold of the legal system and remade it in their image, you can’t amend your claim in the Cook Islands. And if you do lose weight, you’re almost certain to lose, because you’re not going to be able to prove your case beyond a reasonable doubt, you’re going to pay the fees and the cost of the winner. So bottom line with this is that it’s incredibly difficult. Oh, by the way, you’re probably not going to be able to even file your claim down there, because the statute of limitations will have run by the time that they get around to filing the plan. So what’s the advantage of the International option effectively? I mean, it is just incredibly effective. What are the drawbacks? Why don’t I use this every single Time Well, one, you’re going to give up control of your assets to a trustee offshore and not everybody’s ready to do that the costs are significant. And that’s just a set of costs which can run 30 to $50,000 to set something like this up, but the annual maintenance costs can easily run $10,000 a year because of the accounting. And that gets to the third drawback which is compliance, the offshore Trust has to have a fair amount of IRS compliance each year. So again, you know, these things are is there extra taxes, but it is expensive, and you do have to raise your hand with the IRS. So what about the domestic options? This is newer, they came around in 1998. So about 15 years after the cooks trust Alaska decided let’s give it a shot. Once Alaska has passed the statute, bunch of other states jumped on board, definitely Nevada and Wyoming and Delaware. So today we have 16 US states for the past some form of domestic asset protection trust legislation. That state adapts

14:53
right when people call it domestic asset protection. Yeah,

14:56
I think

14:58
Nevada, I think mine’s a setup in the out of a lot of people use that state or

15:03
Yeah, so Nevada got really behind the dat the domestic asset protection trust. And so they’ve been very good about trying to amend their statutes and keep it as current as possible and keep it as aggressive as possible. So if you’re going to use a domestic asset protection trust that is considered the best state. The problem is, is that it’s really only acceptable to Nevada residents. So you may think, oh, we can just go in and use Nevada trust, it doesn’t really work that way. And that’s one of the disadvantages, and that’s why they haven’t worked much of the time. In fact, they don’t work. Most of the time when you’re actually tested. They work as the current if you never really test them, but if you get down to the actual nuts and bolts of attacking them, they’re not coming, I will feel comfortable with you. And

15:46
there’s some bolts that go a little bit deeper. The advantages are, they’re less expensive. They are they’re easier to do. They’re not International, you don’t have to be as skilled to work with a Trust Company here and get documents and make them and there’s lesson plans, because of the Not a form truck, what are the disadvantages? They fail, they have consistently failed, they keep failing when the first time you fail, they said, Oh, this is going to happen a lot. And it has, that kind of has happened. And you have to give up even more control than you can imagine, even to attempt to make adapt work. The reason is, is because Doug was saying is that these specific statutes are just created for the state residents. And so if you’re a California resident using a Nevada asset protection trust, the courts are just going to say, well, you’re not a Nevada resident. Why do I care and you’re seeing this statewide now. And so we have cases like Bailey versus Morrison, and this was actually an Alaskan resident using an Alaskan domestic asset protection trust and the courts are using 10 year drawback provisions now that are attacking the daps assets and they’re just completely failing now and then we have another case in re Hubbard same thing to course completely pierce through an out of state domestic asset protection trust and the trust completely failed. A big one. He’ll Kurvers steelman this was a Calvin For me resident using that Nevada asset protection trust the course used to 10 years look back period. And he created this four years before he ever was sued. And you’re starting to see activist judges. And this is what this court specifically did. They’re just starting to go rogue, they don’t follow case law. And they’re actually starting to use public policy to right wrongs that they feel they need to justify themselves. And so this court created a new completely legal standard called a reasonable foreseeable creditor standard that’s never existed before. And so now, if you’re doing business or you’re owning something, you have to think about, oh, hey, I have a regional receivable creditor that’s going to possibly reach me down the line, which is an impossibility to consider. And so this is a lot of the weaknesses that we have. And so this is just case law back. And so I want you guys to understand this is what we’re seeing in the trend continuing. It’s just not us talking about something we do everything strictly case law compliant.

17:50
Yeah. So it’s great that they exist. It’s great that 16 states have acknowledged that asset protection is a valuable and legal concept. They just don’t work so well. So the question that I asked myself was I want to be offshore, I want my clients to be offshore, but I know that most of them are probably not going to need to use it, there probably is a safety net for just in case and to have maintenance costs of seven or eight or $10,000 a year and to have to file the IRS sometimes several years of pretty big burden just in case. So my question was, is there a way that I can have offshore protection when I need it, but not have the compliance and the cost until I need it? And the answer is the bridge trust. So it’s really a hybrid between domestic and foreign. So it’s offshore protection with domestic simplicity. So what it is, is it is an offshore trust. It’s a full offshore trust, and it’s registered offshore and it has an offshore trustee in standby role. And then for the purposes of the IRS, it is brought across the bridge and it’s domesticated. So from the IRS perspective is a US trusted domestic grant trust, the simplest type of trust and Instead, because of that, because no Iris for 35.8, which are the two compliant forms that have to be done every single year or a foreign trust, you don’t have to file a pin Center, the foreign account Tax Compliance act disclosures, there’s no IRS filing report requirement of any type because we can domestic grants are trust, just like every vocable living trust, same type of tax treatment, your assets can remain in the US with your current bank inside of your holding company inside of your Arizona asset management, limited partnership. You don’t have to have that foreign trustee in an active role. They’re there, but they’re domestic. I mean, they’re standby they are not actively in control of your assets. You can be your own trustee. And this is probably the point that my clients like the most is that they’re their own trustee of their asset protection trust, and it’s totally tax mutual domestic grants or trust. So how is it tests when we look at the four things we want? Was it effective? Yes, it’s a completely affecting because if we ever use it, we declare an event of duress the assets crowd grid and us jurisdiction is dropped completely and it becomes a fully formed trust the Cook Islands trust with all the protections of the Cook Islands. So it is completely effective control, you get your remaining control the trust and less we get to that point where we have to trigger the trust and cross the bridge cost much more reasonable. It’s only a couple of thousand dollars a year to maintain this kind of trust versus eight to $10,000 a year unless the setup and then compliance there’s none. There’s no IRS forms of any kind in less for Intel, we have to cross the bridge, that’s when we’re going to have some compliance. But at that point, I can tell you if you’ve got a serious enough threat where we need to be in a foreign trust, you are going to be happy at that point to pay the compliance and file forms and do all the things because then we’re using the protection,

20:46
this trust era vocable or vocable

20:49
yeah great, great question line. So it is irrevocable. Now, let me explain what that means. When you make something theory vocable you cannot revoke it result. means just completely say, okay, it’s no longer in existence what near vocable does not mean is unchangeable. It is actually this trust is extremely flexible. So it can be amended, it can be modified, the assets can be distributed from it completely. So the fat can be as good as revoking if we need to. So if our clients, they’ve had this trust for over 20 years, you know, they retire or, you know, their asset profile goes down, they give all their assets to their kids. They’re doing some pre Medicaid planning, whatever it is, they say, Doug, I don’t need the trust anymore. It’s no longer I’m not out of that stage, like, Can we get rid of it? And the answer is, yes, we can absolutely get rid of it. We can distribute the assets out of it. Once it’s empty. It can be dissolved administratively. It can’t be revoked, but it does not mean it’s not changeable. If it weren’t reversible lane. If it was a reversible truck from work every possible then we have a real problem from an athletic standpoint, because that a court can just command you to trust the other You sent

22:00
an unfortunate word they’re duress so correct me if I’m wrong because I’m not the lawyer here you guys are but see I get sued at that point I’m in the rest so we’re going to take the stress international and I don’t own it some kind of arm’s length maybe you can kind of talk about how era vocable thing kind of protects me that I’m not the one controlling or won’t pay out to me to pay out to my creditors, right. So irreversible means you don’t have the power to revoke the trust one that protector which is a role inside a trust person or company that is assigned the job when a manager

22:36
is a discretionary iteration is by the protector that they feel is the essence service. So we’ll service with detective in the typical case, client will call up and fold and being good looks bad. He doesn’t think it’s going to turn out well I think very comfortable, we get time to say okay, let’s declare to better direct we declare that events that causes that stand by trustee to become the active trustee of the trust and then they A couple of things. One, they remove the client as a trustee. So the client is not doing this, he’s being removed for the terms of the trust to they decided to drop the US jurisdiction of the trust. So they are no longer considered to us trust. Now it’s a fully formed trust. And then three, they’re probably going to demand the assets be distributed from the Limited Partnership, which they have the power to do under the Arizona statute, which is another reason we use Arizona and take steps to take those assets away from the US Court altogether. So what’s that happened? If you end up in front of a judge and they say, Hey, Lane, you know, we just saw a whole bunch of money. We think you have it, we think to your money and you got a judgment against you. We want you to get it back. You won’t actually have the power to get it back because you are now just a discretionary beneficiary and you’re at the mercy of the offshore trustee as to whether you can get your money back and the terms of the trust clarify to the offshore trustee said if there’s any risk Distributing money to you, like a creditor standing there or court is demanding it that that trustee is not going to distribute any money to you. So that’s why it’s important that it’s an irrevocable trust. It is still part of your state, though this is still your assets. So a lot of times when people think about irrevocable trust the thing about trust, whether they’re not a beneficiary where they are completely have given their assets away, this is different between irrevocable trust in which you are still the beneficiary of the trust.

24:29
Yeah, and I think it brings up an important teaching lesson here. The goal is to control everything but own nothing for liability for you. You got your assets in your home as home equity or paid off homes, you’re like a sitting duck is everybody knows where all your stuff is?

24:44
Yeah, I mean, let me piggyback off of what Doug was saying with that as one on what Doug just said is backed by was called the US first grant case, and this is where this wife husband died on her and they had money overseas and an offshore account Cook Islands and they you know, the hustle Die stuffing the IRS for like things like $36 million. And they tried to sue her three times in the Cook Islands. And to her credit, she tried to get the money back to the government. And that offshore trustee said like sorry, you’re under duress, we’re not going to do it under duress. And so the IRS is actually the SEC tried to ask the court to hold her in contempt like, Hey, sorry, we’re not going to do it. She tried. She just can’t do it. And so that’s the power of it is once the control gets moving out of there, it that’s where the strength kicks into, or even if you want it to under it, you know, the government, the man coming after you can take your money, you’re going to settle these cases for pennies on the dollar, because it’s safe and secure. And I think the next logical question would come from that is, you know what I know from talking with you, and it was a good question that you had this crossing the bridge trade, fraudulent transfer. And so I think you should just answer that question, because it’s the logical place for that,

25:50
right. When I stress tested this amongst the other lawyers, I knew again, they were on an asset protection or more general Yeah, they use the F keyword, fraudulent Transfer because yeah, maybe maybe talk define that just for people to get an understanding of that.

26:05
Sure. Yeah. So what a fraudulent transfer is it’s a transfer, which is very important understand what a transfer is. A transfer is a legal title change. So if I give my card Elaine and I sign the title over to them, I have transferred the car, if I drive my car over the lanes house will say, hey, use it for the weekend, I have not transferred my car. So there’s a it’s a legal distinction, you have to legally change the title to the asset for this definition to apply. So a fraudulent transfer is a legal title change within 10, which is a mental state of mind to delay hinder or defraud a creditor, that sort of project transfers, and if it’s court deems that you have done a problem transfer. The remedy is that they can reverse the transfer in most cases, not a criminal act. It doesn’t have a lot of teeth to it. So it sounds very scary because they use the word fraud and fraud is a very, very serious thing. This is not fraud on the court as it would be different fraud case, it really should be called improper transfer California is actually renamed their statute voidable transaction, which is a much more accurate name. It’s actually just avoidable transaction. If the court deems that you have transferred the property with an intention of delay, hinder or defraud a creditor, they can avoid the transfer and bring the asset back.

27:20
Yeah. And so how this applies to crossing the bridge. So a conveyance happens when you actually change ownership of the asset. And so at the point, if and when you ever would have to cross that bridge, most clients never do. So that’s a good thing. There’s not a change in ownership because the bridge trust was in already owns the assets. Right? When we created it, you already have the foreign offshore asset protection trust and the domestic it’s all one it’s just called the bridge trust. And so when you cross the bridge, there’s no conveyance whatsoever. All that conveyance happened right in the beginning, into the bridge trust,

27:52
right. So that’s one of the reasons why it’s so important to do this planning before you have a problem because if we do it today, and we set this up 2019 and we make all the transfers, that’s when the transfers are going to occur. So your LLC interests are going to go into the asset management Limited Partnership, which in turn is owned by the bridge trust. So the bridge trust and getting all the transfers in 2019. When you don’t have a problem, then in 2025, you have a problem. Now the bridge trust says, Hey, I’m going to take all my assets, I’m going to take my toys and go over here and play. I don’t like playing over here because you guys are risking my money. That’s not a transfer, the bridge trust is owned all those assets since 2019. So it’s not a fraudulent transfer either. Because in 2019, you didn’t have that creditor. So it’s very important that if you’re looking at this, it’s better to do it early and build your assets inside of the structure versus waiting until you’ve gotten all your assets and your now you want to protect them. I’d much rather have somebody come to me when they have you know, $100,000 in their starting then we can say okay, let’s layer into this. Let’s use the LLCs and then we’ll add that the holy cow And then we’ll add the bridge trust then to wait until you have $2 million, and then come to me and say, Hey, you know, I think I should protect it. Unfortunately, most people wait, they don’t think about it. They didn’t get the information. They don’t have late to give a webinar on this. And so they’d never heard of it, then they end up in trouble. And then they call me and they The first thing out of their mouth is I wish I would have known about this 10 years ago,

29:20
I’ll just fraudulent transfer is somebody Sue’s you today, and then you create an LLC tomorrow and you put all your titles into that property, or a creditor Sue’s you and now you try to hide bank account money to another hidden bank account that would right, yeah, this example of a Francia. That’s

29:37
a good breakdown

29:38
explanation that you guys just gave, why is it not a function of transfer? You guys have to think for yourselves. Me personally, I’m kind of coming around to the idea.

29:46
Yeah, it’s important to think, you know, here’s the other thing on this point is once you cross the bridge, the court here doesn’t have any power to avoid the transaction. They might say, Well, you know what, we’d be mad at problem transfer. We don’t care. We’re gonna make up a new We’re going to do the president transfer anyway, because we’re trying to get a result. Well, that’s fine. But the Cook Islands is not going to recognize that from the US Court. So even if the court here didn’t deem a transfer, that is not fraudulent transfer, by definition, but they sit in any way, as Brian said, they make up their own rules all the time. Even if they did, they won’t actually have any power to get some money back from the copilot. This leaves you in the driver’s seat, very important concept of asset protection is not about telling everybody to go pound sand. It’s about putting yourself in a position where you can negotiate and you have leverage. It’s all about leverage. This is the whole deal. We want our clients with the leverage so that if you do get into a scrape, and you do need to make a deal, it’s a deal on your terms, not on their terms. If your assets are all sitting and available, then you’re going to feel much more vulnerable, you’re going to cut a much worse deal to avoid going to trial, whereas if your assets are all protected, you’re going to have a much better deal. You’re going to take your trial, go ahead, even if you can win, you’re not going to collect against me, I have seen this work so many times it is so effective. I just wish everybody would realize the power of that, because that’s what this is all about. It works

31:13
because law firms or businesses, first thing I always had was, is am I going to make my profit off of this? You know, and my cost? And so I always had to understand what assets were there what assets were available and not average? Where’s the money coming from? How much is the case going to cost? And if I don’t make a profit, my doors are gonna close very, very soon. So people need to forget about the business end of law firms also this attacks the business and

31:37
yeah, we take away the incentive

31:38
what’s August saying most court cases it’ll be a settlement right? What is it 99% or something like that? I personally like the attitude of go pound sand guys, if you guys want to sue me. First of all, you have to find the lawyer that’s licensed and the Cook Islands of the Flies but out there but he’s definitely going to have to work off no retainer, right, which is kind of like Brian.

31:57
I used to go pound sand a lot.

32:00
Well, I like to compare everybody that it’s about negotiation, there are definitely times where we tell them to go downtown, because that’s the best possible negotiation tactic we can do. I mean, we absolutely use it all the time. And it works. I mean, you know, it’s just that strong.

32:14
Yeah. And I think one of the, you know, it’s not really about anonymity at this point, because it’s strong. And so if you are being sued, like, here’s my bridge trust, here’s my offshore Commons account. If this were to get a judgment against me, you’re not going to collect anything penny on the dollar. Goodbye. So

32:28
let me put it all together. I’m very visual, I like to see how things kind of work in a graph. So here’s the asset management, limited partnership, put that in center, because that’s your holding company. We also then add to as your LLC and make little houses out of the LLC is because they hold houses, they can hold boats, they can hold airplanes, any kind of asset that you value, or that has enough risk that we want to isolate it and then you have the bridge trust and then you have your estate plan, which is typically a revocable living trust. So how does this all fit together? Well The limited liability companies are going to be owned by the asset management limited partnership. So they’re going to be an asset of the limited partnership. What else goes in the asset management, limited partnership, your cash, your stocks, your bonds, your collectibles, your Bitcoin, your cryptocurrency, any kind of securitized assets and going to go in there directly. So the end game is that most of your assets are going to be in the asset management limited partnership. So who owns and controls the asset management Limited Partnership? Well, you control it because you’re the general partner and the bridge trust owns it because it’s the limited partner so you have control and the bridge Trust has ownership. This is where we get that fraudulent conveyance concept. The bridge trust already owns all these assets. So if you die, then we have straight up pass through the remarkable living trust all the bridge test assets actually passed down through the remarkable living trust and they distribute to your estate you maximize your estate tax exemptions, you avoid probate any assets smoothly pass to Air, that’s the most likely kick or we have a real threat at which point the assets get demanded from the bridge trust. And then the bridge trust takes whatever steps it deems prudent, which can include moving those assets actually offshore physically offshore. That means we have opened up Swiss accounts, move apples to Switzerland, had the Brinks trucks go and pick up all your gold and I have one client who’s got this ridiculous art collection with several million dollars. And I remember distinctly the day we had a discussion about how we’re going to have it all picked up by secure bands and taken to a secure vault in the custody of the trustee so that if someone came to shares came and wanted to collect all his art, it wouldn’t be available, it wouldn’t be there for them, and there’d be no way that they could force him to bring it back. So that’s the concept. This is a really high level presentation. The best thing that Brian and I can do for you is really to individually talk to you about your specific situation. So I really want to encourage you to call uses as a TAS for dialysis but for Lane and his group there is none. So we will talk to you at no charge and help you understand if you want to just have a conversation about your specific assets or situation your risk, but everybody’s different. This is just a very generic high level approach to it. So I hope that was helpful and definitely questions we’d be happy to answer. I got a couple on this cruising through some of the chat. So Mark Terry asks, What is the majority of your assets are held in retirement accounts at the present time? Is this a type of protection as needed? Great, great question. So Mark, you’re pretty much solid. If you’re in a risk type qualified retirement plan, you already have asset protection because believer if the US government actually believes in this concept and they actually don’t want to leave people destitute because guess who gets to support destitute people in retirement government, so retirement plans, particularly a risk of qualified plans, but also IRAs to some degree based on your state are already protected? So you don’t have to use this type of planning. If you are already in a qualified plan,

36:05
as you say, like for the IRA, part of it, is it you know, it’s state dependent. And so some will have great protection, and we’re going to have completely crappy protection, and they’re not going to protect you for IRAs for you know, there’s always going to be a fraudulent or unintentional hacked argument, because that’s an exemption for those protections from that. And then another one, what is the source of the risk that you think is the concern here and I think one of the main concerns here is people don’t know where they’re going to get sued from you can is negligent things that come and bite you. In the butt end of the day, a lot of times you loan out your car, the person drinking and driving and t-bone somebody you own a rental property and there’s a fire or one of the renters holds a party and they get drunk, someone gets drunk and kill somebody drinking and driving. You own a business. There’s a lot of liability in owning a business that people don’t even think about just from owning the business. You’re a medical doctor in your investing real estate investors have some of the highest litigation is I think the heaviest litigated area law that there is you can get sued from so many ways, and so the more you have the more you know, moving parts you have, the more concerned you’re going to be about the litigation side of things. And just the unknown.

37:08
Yeah, that’s the best answer there. You have no idea what you can be sued for. Sometimes just having money is enough to get somebody interested in suing you. So my philosophy is just create as much of a barrier as you can

37:20
become the target. I got a question. So you got your houses, you’re putting it in the lock there. You got an LLC is what lock is that an LLC? Is that an escort?

37:30
No, that’s the asset management limited partnership. That’s that Arizona holding company that we talked about. Maybe you can

37:36
talk a little bit about what is the advantages of Arizona op?

37:40
Yeah, so there’s a couple of distinct ones. One, Arizona has followed suit with Nevada, Delaware, Wyoming and made the charging order the exclusive and sole remedy against a partner in the partnership. So in Arizona, they will not foreclose on the partnership and ongoing and reach them during asset so if you have a krendler what happens is if you’re also ternal, a limited partnership in Arizona, and that creditor gets a million dollar judgment against you, and you have a million dollars sitting in cash inside of this partnership, that coordinator zone is not going to say, Oh, you got a million dollars, just give it to your creditor, they’re gonna say, Oh, it’s in a partnership, sorry, Mr. creditor, here’s what we can give you, we can give you something called a charge against the members interest. And if there’s ever a distribution, yes, that’s an if there’s ever distribution, then you can get that distribution. But if there’s not, you can’t force a distribution and you can’t get to the underlying asset. So that’s very important. That’s the whole point of a limited liability company is the whole point of the charging order. The other thing that was on the house was unique in my experiences, they have a little section in their statute, which when I ran across it, I just thought oh my god, this is the ideal way to connect the bridge trust is there is on the 29 dash 333. And what it says is that a limited partner can make a demand for a unilateral withdraw. The partnership upon the occurrence of a predefined event. And so what we do is we predefined the event as an event of direct. And so when that happens instead of you as a general partner making the demand or making a distribution to the limited partner, which could be seen as you facilitating a private transfer, even though it’s not a transfer, we have the trust itself make a demand. So it’s just a great way when we cross the bridge to actually suck the assets out of a limited partnership. So the net apostles, once we cross the bridge, there’s really no more assets than the limited partnership, it’s there. But if they can go try to attack this, they won’t really know what tendered anyway is kind of act as a red herring out there for them to try to spend their time and energy when they finally realize that oh my god, it’s been cleaned out and the money is all over the column. So that’s why I like Arizona, My office is in Arizona as well so we can easily manage the thousands of limited partnerships that we have set up and finally there’s one thing that is truly unique in my experience Arizona and only for limited partnerships does not have any paperwork required or any annual fee. So once I set up a limited partnership in Arizona unless I actively dissolve it, it stays valid. I had another guy call me and he had set up his holding company as a Nevada LLC, which is a common thing. I see it a lot. And he didn’t pay the fee. And Nevada had gotten behind several years. He just kind of figured that there. And then he had to use it. And he called me. He said, Doug, what do I do? And I looked at the entire structure he had set up with somebody else. I said, You’ve got to revive this and he goes, Okay, can you do that? For me, the bill for reviving his LLC was going to be $8,000. And even then we had the risk of the court looking at it saying, well, it was defunct for five years and disregarding it like Brian said in the beginning, that’s a case where the corporate veil was very likely to be pierced. So just not having to worry about that in Arizona is a huge factor for me because I know my parents are never going to have a inadvertence Dissolve holding company because somebody didn’t power for. And so you know, the big elephant in the room question, you know, what’s the cost of this. And so the pricing is fixed the bridge trust cost $23,000. And then the MLP cost 6000. So together, that’s $29,000. And then you can choose to pay 50% retainer, and then the balance when the documents arrive, if you want to go that route, if you pay up front, we generally give a 10% discount. And then another really good question, kind of like on the nuts and bolts of the details of it. This is from Jeff, but all the assets need to be transferred into the MLP. So the entity is the owner, correct? The MLP is the majority ownership that’s like where you’re going to control the holding zone, what’s going to be the owners the bridge trust and what the minority share of a MLP right, the MLP is going to own the actual assets. It will own the interest in the LLC that will own the bank account, but it internally own so it’s just a subsidiary of the bridge trust. So the ultimate owners brands that is the bridge trust

41:58
that process is Pretty simple. You just if you have rental properties, you retitle it into the LP.

42:04
Yeah, yeah. Well, you retired from the rental properties, they should be in an LLC first. So they probably already are for most of your people on this call, you’ve already done that part. So then all we have to do is change the member of the LLC to the MLP.

42:17
And that is very simple to do. What about LP investments that you have in your personal name,

42:22
so those you’d want to switch to the am LP as well. So if you get a bunch of LP investments in your personal name, you would just switch those you call up the manager of the LP and ask them to switch it?

42:35
Here’s a good question or banks, or lenders going to under even understand this setup when they’re applying for loans. And do you think that this is going to essentially affect their ability to, you know, get loans if there is an issue, you know, you can jump on the phone and talk to them but it’s just like any other asset protection system things generally want to know what it is that you have not like what’s on which just what the system is and that is for asset protection is kind of like having, you know, an LLC with the land. interest you say, Hey, I got an LLC for your land trust for asset protection. Like, okay, we got it.

43:05
Yeah, I mean, here’s my experience on that is that banks have gotten very picky. And oftentimes I see clients that have just a home and a revocable living trust, which is the most vanilla thing you can possibly do. And the banks want you to take it out, get the mortgage, and then put it back in. I have tons of real estate people, by and large, this doesn’t create any real issues, it’s just that we do have to sometimes take extra steps. So if you’re used to buying properties with the bank, and you buy them in your own name, and then you transfer them to the LLC, that’s the way you’ve been doing it. We’re going to tell you to continue that way.

43:42
So the only issues I’ve seen is with individuals going to a private lender with a private attorney who doesn’t even understand anything about asset protection or LLCs. At all. That’s the most difficult situation I’ve run across.

43:55
Yeah, but generally, my real estate clients have not had any big problem at all.

43:59
I got an Question when I was doing my due diligence on this structure, another issue that I saw come up, it’s not really has any structure, but let’s just say you get sued and we’re going to take it across the bridge, the Cook Islands, or wherever there’s some scams out there for like, you know that when the money goes overseas, that it goes to a trustworthy third party, what are some ways we can protect against

44:22
will lay? That’s the best question ever, because you transfer your money to protect it to somebody who’s just going to take it that didn’t do the job. So the answer is, is that when you transfer your money, it’s only ever going to go to a real bank, like we’re talking about Swiss private bank that is completely unrelated to the trustee in the Cook Islands. You’re going to have a relationship with the banker. I mean, you’re with the banks are wrestling with the Euro, the Ubl, which in banking terms mean underlying beneficial owner, the bank is going to do their due diligence on you personally, and that money will never leave the bank will Your approval because the bank knows that you’re the overview video. And even if you’re not the legal title holder or even a signer on the account, which you wouldn’t be in the case of those offshore Trust Company in control of it, the bank is never going to let that money out of their site without your explicit approval. So you know it unless you’re crazy enough to send your money down to somebody wire instructions that you don’t really know who they are in our model. You’re never going to lose sight of your money. I made sure that not me, not the trustee offshore, not at buddy, do I really, really trust the only person I really trust with your money is you I’m going to make sure you are always the one with your eyes on your own money.

45:38
Yeah, so when these are drafted properly, there’s internal checks and balances that are created within the trust itself. And so like Doug was saying involves a trustee and then a trust protector looking over the trustee and then you the client looking over the trust protector and then at the end of the bank that you choose, and they have built in delays and you know, like client consent requirements. before they can even transfer anything whatsoever. And so the effect of this is that virtually it’s going to be impossible to make any kind of move without you knowing about it.

46:08
Not even just knowing about it, approving it in the case of your money leaving the bank, if you’re going to leave the bank, you are going to have to prove it, you’re going to get a phone call, it’s going to be somebody you know, who knows you they’re gonna want signatures from you, even though you’re not interested. So, I mean, there’s just no way I would send my money without knowing that I have that control, or I would advise a client send their money without knowing they have that control. Another question, what are the annual recurring cost to the annual fee and the bridge trust? Yeah, so the costs are fixed, and it’s 20 $100 per year for all of the maintenance on it for renewing your trust each year offshore, which is required for We service the statutory agent in Arizona for the partnership, We service the attorney and once you’re a client, we don’t charge by the hour. So other than that annual fee, that’s the only thing you pay. We do Annual minutes each year we do annual meeting. And as much as you need to call me for questions, I had a client call me tonight just wanted to ask a question to five minutes. But you know, he got his answer right away. So he knows what to do tomorrow when he gets into the office and we get it right without you worrying about the bill, if I talked to your CPA, if I talked to your advisor, your financial advisors, whoever, I’m never going to build for that. So it’s very simple. The only additional tax return you have, which is your only other costs in this whole structure is a tax returns done by your CPA is for the holding company for that a MLP. That Asset Management limited partnership. And that’s a very straightforward 1065 return. If you have an LLC that’s multi member you already used to doing that return the exact same return as a multi member LLC has to do

47:47
why the Cook Islands or what are some other other areas you go for to go across that.

47:53
Yeah. Okay. That’s a great question. So, so we talked about the international and domestic. So we decided if we really in trouble, we definitely want to be International, then the question is where international would be the best. So Cook Islands is considered the premier jurisdiction for a couple of reasons. One, they were first they literally invented this entire area of law. They drafted and passed the first statute which allowed for this to occur. And since then, we have about 24 other jurisdictions that have jumped on board everybody from the Bahamas to need us to Grand Cayman. And the issue with them is that they’re all kind of me two jurisdictions. They’re also jurisdictions that all have another source of revenue. They are they do facing they do insurance, their tourism, the Cook Islands pretty much has asset protection, that is its industry it has developed to become a huge, huge part of their economy is extremely important in the Cook Islands. And not only were they first and therefore has almost all of the initial cases come through the Cook Islands, but they have continued to evolve their statues pathway statue Pass amendment and improve it to make it better and better. So in my opinion, they’re just the best jurisdiction because of their level of experience and the fact that they are very proactive and making sure that this works. If we ever get a case that flat out fails in the cookout and I can promise you they will no longer be the criminal jurisdiction. Their incentive to keep to not have that happen is just massive. I like that I like to be hedged that much with my clients. I want the cookouts rooting for my clients as much as I’m rooting for my clients and you can

49:33
sit there and you know Suzy cases of these being challenged in the Cook Islands you can say that but if you go to like Anima Bahamas or you know these other areas you can you can get a cheaper offshore asset protection trust in the Bahamas. But then what happens when you’re sued is oh shoot now we’ve got to go create that Cook Islands one because now we actually are under fire and we need one that actually works. And so that’s the other caveat of it.

49:54
I got another question for you guys are going to fix my asset protection. I spent like 14 grand sitting This elaborate equity stripping scheme. Can you explain to the folks what what that is and why that doesn’t really work?

50:09
Okay, my money

50:09
doesn’t go to nothing that it?

50:12
Well, okay. So I’ll tell you stripping is a concept which says if you don’t have any equity, then they can’t take it from you. And that’s true. So if you go to the bank and you strip equity out with the bank, and you don’t have any equity and you take that money from the bank and you put it somewhere safe, equity stripping absolutely works. The problem with the way a lot of people have converted it or perverted it is that they say, Okay, great, well, let’s just do that. But we don’t want to use a real bank. We don’t want to use your bill transfer, we’re going to have us set up your own company, let’s use Wyoming because they don’t they have a privacy statutes so that no one will know about you, and then we’ll have that company put a lien against your property, and therefore we’re stripping the equity out of it. The problem with that is that you haven’t stripped the actual All you’ve done is record a lien, that’s all you’ve done. There is no transfer of real cash values for that lien. And when you’re sitting in a debtors exam, after you’ve gotten the judgment against you, and they asked you to under oath, explain who this company is, and who you dealt with when you got that loan, and they find out that you actually own that company that that loan will just evaporate. And so equity stripping done with your own company in another jurisdiction, pretending that it’s not you is at gas, a little bit of privacy. It’s just a little tiny shield of privacy, but that privacy doesn’t go very far in a real lawsuit. And Brian can tell you as a litigator that he would tread through that and just about two seconds

51:43
did not have it really comes down to what you’re getting from these loans. And no matter what judge I ever go to a mediator, you know, arbitration, it doesn’t bolster the case, it really looks bad and doesn’t pass the smell test. And so because we’re using these friendly loans, a judge is just going to say sorry, that’s probably And we’re going down to create the wrong way, what you want is the system and the structure in place to where if you ever had to go and strip the equity and move it, you know, that’s the last piece of the pie that you need to have, you don’t need to go that far. Generally, if you have a system that we’re talking about in place already, because the system is going to protect you already, if you were completely sued Your hair’s on fire, you know, Doug, and I talking like, yeah, this is just going bad really fast, then all you care about at the end of the day is not even what you own, but just getting all your assets out. And so we would just fire, sell everything, strip all the equity out, and then transfer everything over create Swiss bank accounts, and that’s where that would go. But that’s the last piece of the pie that most people don’t ever need to go at that stage. And so I also see it as a loss of potential use of your equity, you know, especially if you’re investing and you want to use it. Now you tie it up with friendly loan on there. And now if you ever want to use that equity, now you’re going to have to then pay off your friendly loan and it just creates more problems. So I would say It’s a great idea and concept that people have is the last piece of the pie when you’re talking about protection that’s needed. And if you are to ever be challenged, the court is going to look at it. And it’s just not going to pass the smell test unless you get a fair market value loan. Yeah,

53:13
absolutely.

53:14
We got a couple other questions here. Will I need to set up a foreign bank account just in case my trust needs to cross the bridge? Or do you set that up after your interest?

53:24
Yeah, that’s a really good question. So you do not need to set up before a bank. Now, there are some costs of setting up a foreign bank account. There’s some changes in the way you have to deal with foreign bank. They’re much more private banking style, there’s some minimum sometimes that you have to meet to open an account and most of our clients do not set one up just because they don’t need it. They don’t want it. They’re happy with their Mondays and the money where it is. I do have some clients that they actually want a foreign bank account. They have some concerns about things on this side of the fence and they just want to have some diversification. If you want it, it’s totally fine to do but it’s You don’t take it’s not really applicable to you, then you don’t need to do it. We could set it up after we cross the bridge. That’s totally fine. And that’s how we do it most of the time

54:10
in the follow up to that what countries are best for that bank account?

54:14
Yeah, so the bank account is it’s really Switzerland, Liechtenstein, Luxembourg. We’re talking about the European banking Center, the private banking Center. This is where just massive amount of global wealth is. It’s not private, in the sense that we used to watch James Bond movies with, you know, Swiss private member to cancer, the term you know, john Grisham was the number to count that doesn’t exist anymore. All accounts are transparent. They all report to the IRS. So sometimes I get clients say, oh, I’ve heard about when you take your money offshore, you don’t have to pay any taxes until you bring it back. That is completely untrue. You have to pay taxes on all the money you earn anywhere in the world that you earn it even if you earned it on Mars. If you go mine and ask where you’re going to pay taxes on that profit that you earn on the asteroid If you’re a US citizen or resident, because the US taxes on a worldwide income, so it doesn’t matter where you earn it. So it’s not about hiding from the IRS or even deferring taxes. It’s simply about protection. Because those banks do not have us branches. They don’t have any us any way a US Court can get jurisdiction over them. And so from a purely asset protection standpoint, they’re extremely solid. And from a staking capitalization standpoint, they are much more solid than the banks that we’re used to dealing with here. We think our banks are the best in the world, but they’re not they’re not even close. Our banks are underfunded radically because we use fractional reserve banking, whereas the Swiss banks are not they don’t use fractional reserve banking, they actually make the banks hold your money. That’s why it says banking costs more. They actually don’t pay you interest to hold your money. You pay them interest to hold your money. That’s how they make their money. You actually pay them a reverse AIDS is great. It’s usually anywhere from a third of about to a half a percentage point. Just to have an account at a Swiss bank but what you’re getting for that is security level that you can’t be achieved the master quitting. I got an interesting question here. So say you’re going to get married you set one of these entities up is it technically you don’t own anything at that point. So if you happen to get divorce can get the rest are the rest, but then he comments on this. Yeah, so no, technically, it’s not that you don’t own anything. It’s that you own separate assets. So if you are going to get married and you have assets, and you want to make sure that they are not subject to the divorce, this would absolutely be appropriate for you. But it doesn’t mean you don’t own them. It just means that they are completely separate assets and that in a divorce, as long as you keep them separate and you don’t transmute them by transferring them into your spouse’s name, then in the divorce, then your spouse will have no access to important degrees and say

56:54
forget married have a prenuptial with it and it will strengthen the system even more Someone just said like prenuptial on the is a way to strengthen the system. But there’s community property and separate property and you don’t want to commingle your assets. And anything you start accumulating during that marriage is going to be deemed community property. And so the next question like, Oh, I want to get into divorce, is this gonna protect me from having to give my spouse I’m divorcing assets? No, no, because community assets was communities community, and you’re gonna have to go through the court system to determine who gets what, but there’s ways that you can structure and we can work through the system to protect the individual assets, the separate property, and so there’s ways to work within the system for that. So

57:35
if you’re going to do this, and you want to keep that separate property, you don’t want the future spouses name on the trust or how to ensure like if you are married, and then transfer them to them as it should talk a little bit.

57:48
If you are married, and you end up with the divorce. I mean, if you end up dying and you want the assets transferred, then they’re going to transfer because you’re going to direct the bridge just to pay your statement. plunger Mary’s it’ll transfer without any issue whatsoever if you get divorced. So then of course, you’re going to change that and you’re not going to leave your house with your spouse. In the end, the planning itself will protect me from divorce. I will say I think Brian’s 1,000%, right. If you’re getting married, I think a prenuptial is appropriate. They can do things that the trust cannot plan for agree on alimony payments and agree on how you’re segregating what would be otherwise community assets. And it gives great strength to the fact that you want to continue adding assets to your separate property asset protection plan. So I would recommend both some clients come to me and they go, Doug, I just can’t do both like I’m not going to go and so we have to use just the asset protection planning. And in that case, I just say you’re going to have to be very strict. You need to basically close this plan down except for clearly separate assets. We can work around it but a prenuptial is definitely in conjunction with the Aqua protection structure is the best option.

59:00
What’s your guys’s opinion on the series LLC? I know a lot. We’ve been highlighting a lot of chatter on that a lot of California folks are trying to get her on the LLC $800 charge.

59:09
Okay, so series LLC, it’s a great concept. It says, hey, let’s create an LLC, one tax ID number and then we’ll create a series so that way you can have two separate protection, but just one tax ID number. I have a client who wasn’t a client, he called me he had a series LLC, he had three properties in series, all in California, each property was a million dollar property. One of the property had a mold issue, and it was a $5 million dollar claim it was going to exceed his liability insurance by $4 million. And so he calls me because he had thought he was all set. And his attorney told him, Hey, your other two properties are probably at risk. And so he called me in an absolute panic because he realized that the series was going to fail once it actually got tested. And so we had to do some fancy dancing last Second to try to solve that situation. My opinion is if you care about asset protection and segregating the properties, I would not use a series LLC. If you don’t care about segregating the property, then a series LLC is okay. But you need to think of it as just one LLC from a liability standpoint, even though the entire concept is that it’s not one LLC, we don’t have enough good case law that has supported that definitely not in California,

1:00:27
waste of a series because then you just have an LLC and the issue with it is I like them but only if you live in that state that has series LLC legislation, and if the asset that you own is in a state that has series LLC legislation, because if you’re in one that doesn’t have it, the court system say we don’t care we don’t have a series LLC, we don’t recognize the series LLC. Wonderful. And that’s the problem. They’re just not going to recognize it and we see it over and over. And then you know, like you’re talking about the California franchise tag, you know, then you have what’s called Delaware statutory trust, but The issue of those now as they’re being pierced is domestic hasn’t had the power of the offshore and those are being pierced now and so when you keep seeing is keep the constant pattern purely domestic is not for protection

1:01:10
I think the last one for close it out is what do you guys suggest for people net worth half a million dollars make a pretty decent salary? hundred hundred 50,000 a year? Maybe this is overkill, but what do you guys suggest for that individual?

1:01:23
Yeah, I mean, I would definitely that’s really a good time to start. Definitely if you have real estate, you’re going to want the LLC definitely the asset management Limited Partnership if you have that much in whether it’s real estate or cash, you know, and whether you’re ready to add the bridge trust right now or or not quite yet kind of depends on the speed of your of your accumulation and where you’re headed. So, you know, you may or may not want to add the bridge trust to be ready for it. But definitely, you’d probably want to add the first two levels and I would strongly encourage you to call and talk it through or just kind of look at your overall picture. It might be enough that we don’t need the bridge for you right now is scalable. And I was just saying that you may not need that bridge trust component right now. But the fact that you know about it, it gives you a better projection for down the line of saying I might need it two or three years down the road. So now how do I set this up and get into the network as I grow, and then how do I grow properly, and then it’s get the properties out of your name, get the LLC, maybe you need the LLC with the am LP and then you know that now I can bring in the bridge trust later on when I need it. And as Doug says it a lot as funny as it may sound, you know that 500,000 to a million dollar mark is actually we get a lot of clients in that range because it takes a lot of time and energy and money for a lot of people to make that kind of money. And so they’re scared rightfully of losing it everything. You know, I had one client the other day call she has just at the million dollar mark property manager and owns about four properties. And it took her a really long time 25 years to get everything that she owned at that point and she just wanted to make sure it was safe and secure and she went to the bridge trust option, even though guy saying, Hey, you know, let’s scale you up LLC a MLP. And so it’s just a matter of risk tolerance and where you are in your life and how concerned you are about where your risk is coming from.

1:03:10
Yeah, and I’ll kind of close this out for me I’m probably more risk tolerant in terms of like litigation maybe because I, again, general partner a lot of these deals kind of out there on target, but there’s no worse feeling than feeling like somebody can just do a frivolous lawsuit against you. And then you know, whether they win or not is one thing, but just the tie of your assets and that mental bandwidth going to that individual who’s just trolling you, I you know, if you had something set up like this, and this, which is why I’m doing it, you kind of laugh at that situation. You get upon your San line you can use and you’re kind of interested in See how it’s going to work. It’s kind of like taxes, right? If you do everything that you’re supposed to be doing and you get audited, you should be alright, this IRS agents, but actually learn something from it. It’s a very empowering,

1:03:56
I use that same thing of starting to use as a talk is no one’s really interested in tackling Is until you start making money and then you love tax Yeah, learning how to make more making money, make more money and then like, Oh shoot, I need to protect it and then there’s all this new bubble that you need to start learning about and then you get obsessed about asset protection, but it’s the same thing you know, with the taxes.

1:04:15
I mean, I’m running out of stuff to buy to be honest for Christmas. I’ve been this is kind of exciting to me. But you guys have any more questions, feel free to shoot me an email. I will post this up in the mastermind channel. But you guys want to reach out to Brian or Doug there. The email is up there. Brian at vt Eagle comm Bible 37730077 any last words are you think we got it all guys

1:04:39
think we got it

1:04:45
this website offers very general information concerning real estate for investment purposes every investor situation is unique. Always seek the services of licensed third party appraisers inspectors to verify the valuing condition of any property you intend to purchase. Use the services of professional title escrow companies and licensed tax investment and or legal advisor before relying on any information contained herein information is not guaranteed as an everyday investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.

 

More legal info – SimplePassiveCashflow.com/legal

What is the majority of your assets are held in retirement accounts at the present time? Is this the type of protection that’s needed? You’re pretty much solid. If you’re in a risk type qualified retirement plan, you already have asset protection because believer if the US government actually believes in this concept, and they actually don’t want to leave people destitute, because guess who gets to support destitute people in retirement to government, so retirement plans, particularly a risk of qualified plans, but also IRAs, to some degree based on your state are already protected? So you don’t have to use this type of planning. If your assets are already in a qualified plan. You guys gonna say like for the IRA, part of it, is it you know, it’s state dependent, and so some will have great production and we’re going to have completely crappy protection, and they’re not going to protect you for IRAs. For You know, there’s always going to be a fraudulent or unintentional hack argument because that’s an exemption for those protections.

More legal info – SimplePassiveCashflow.com/legal

There’s some scams out there for like, you know, like when the money goes overseas that it goes to a not a trustworthy third party, what are some ways we can protect against?

So the answer is, is that when you transfer your money, it’s only ever going to go to a real bank. Like we’re talking about Swiss private bank that is completely unrelated to the trustee in the Cook Islands, you’re going to have a relationship with the banker. I mean, you’re with the banks are roughly the Euro, the Ubl, which in banking terms mean, underlying beneficial owner, the bank is going to do their due diligence on you personally, and that money will never leave the bank without your approval, because the bank knows that you’re the overview video. And even if you’re not the legal title holder, or even the signer on the account, which you wouldn’t be in the case of those offshore Trust Company in control of it. The bank is never going to let that money out of their site without your explicit approval. So you know it unless you’re crazy enough to send your money down to somebody Via instruction that you don’t really know who they are in our model, you’re never going to lose sight of your mind. I made sure that not me, not the trustee offshore, not at buddy, do I really, really trust, the only person I really trust with your money is you, I’m going to make sure you were always the one with your eyes on your own money. So when these are drafted properly, there’s internal checks and balances that are created within the trust itself. And so like Doug was saying, it involves a trustee, and then a trust protector, looking over the trustee, and then you the client looking over the trust protector. And then at the end of the day, the bank that you choose, and they have built in delays, and you know, like client consent requirements before they can even transfer anything whatsoever. And so the effect of this is that virtually it’s going to be impossible to make any kind of move without you knowing about it. Not even knowing about it, approving it in the case of your money leaving the bank. If you’re going to leave the bank, you are going to have to prove it. You’re going to get a phone call. It’s going to be somebody you know, who knows you they’re going to want signatures from you. Even though You’re not interested. So, I mean, there’s just no way I would send my money without knowing that I have that control or I would advise a client send their money without knowing they have that control.

More legal info – SimplePassiveCashflow.com/legal

What do we do after you’ve got the LLC? Well, from there, we look at a tool called an asset management limited partnership. You can think of this as a holding company. This is where your LLC goes in this model, you’re going to actually have a holding company that’s a member. So it’s going to hold your LLC interest whether you want 100% of the LLC, whether you own 10%, whether you’re 1%, it doesn’t matter whatever percentage you all make and hold other companies that can hold stock cash, any kind of securitized assets. And here we get a choice because if you have real estate in California, and you created a Nevada LLC, thinking I’m gonna get all this great Nevada protection, and then you put California real estate in it, we can absolutely tell you for sure a California Court is not going to apply Nevada law because it’s holding California real estate. This changes though when we use a holding company because the holding company is not in California doing business. It’s whatever state and we use Arizona, Arizona has great charging order protection, it’s statutorily The only exclusive remedy in Arizona so they do not break into limited partnerships and foreclose on the underlying assets. You can include your family member in the holding company, you do have partners that you work with. It’s a great way to create a family’s asset and if you want we can actually make this private

 

 

0:00
What are some of the BS things you hear from your investors? They’re shooting themselves as a deal?

0:04
Well, the first thing that happens with a lot of people is just sheer ignorance. I don’t mean that in a disrespectful way is that they don’t you don’t know what you don’t know. But within the context of the United States, there are hundreds of markets you can invest in. So just knowing that should tell you that there are a lot of opportunities out there available to you, you just need to have either the right guidance or right mentor, the right team to work with. So the whole thing about ignorance, it’s not that it’s bliss, it’s expensive. Second is fear, fear, you know, when you unfamiliar with something, and it’s new and you don’t know what the next step is, or what to do, or how to tackle a problem, even if it’s for your own benefit, meaning growing a portfolio and having passive income and creating wealth, and it’s everything that is feeding your benefits and achieving your goals. If you don’t know how to do that, and it looks like a monumental task and a big mystery. Then you have this element of fear and you can easily talk yourself out of fear. The acronym for fear is false evidence appearing real and that’s probably the biggest hurdle for a lot of people. Just fear

Transcribed by https://otter.ai

0:00
One or two of the markets they’re easier August one of the stronger ones where person should kind of start off that and then the one or two that are not going to hold you to it but kind of sleepers or maybe tertiary markets to be on the lookout for

0:09
the answer is it depends. It depends on how you’re defining the best market because if you’re an investor that is looking for a what I call a boring market, you’re only in it for keeping pace with inflation and getting cash flow. So just a solid cash flow market cash flow property, a market like Indianapolis, Indiana Memphis, Tennessee, Oklahoma City definitely Alabama markets like we’re in Birmingham, Montgomery and Huntsville I wouldn’t call Huntsville necessarily sleeper market anymore it’s starting to take off the Birmingham Montgomery for sure those are tried and true very linear, very steady markets you start looking at other markets that have a lot more growth potential there little more cyclical in nature, but Jacksonville, Florida Dallas has been this way for the last two three years Kansas City has been this way for the last three years or so

0:44
any tertiary markets that you kind of like noticed an interesting

0:47
Well, actually the outskirts of the Greater Chicago area which was and crosses over into northern Indiana is one area many parts of Wisconsin are becoming a strong growth markets and a lot of people are not even aware of that.

Transcribed by https://otter.ai

0:00 For the podcast listener out there whose heads spinning right now stop focusing on the statistics and pick a couple markets and just see who you gel with, whether it’s property managers, brokers, or I mean, this is where the pitch Where is hey man just joined the mastermind you got all these other 40 other people, they’re buying properties right there with you, you build relationships and this is how passive investors should do it in my opinion. Yeah. And forget that drivability factor, you know, the so called gurus out there saying that you should only quote unquote invest within a one or two hour radius of where you live is misguided information, in fact, in many cases is really bad information. I can’t imagine that you have a lot of cheap or affordable neighborhoods or areas in parts of Hawaii that make a whole lot of sense in terms of investing, you know, I related to Northern California, it’s just it’s gotten so expensive, and rents haven’t scaled as fast as that the appreciation in price. So when you have that delta growing over time between rents and property values, when you get into that market, you start acquiring rentals, you just don’t have the returns that you need to make it a logical OR prudent investment. Yeah, I think that the house flipping gurus are just trying to trick us to invest in their students jump flip deals.