July 16, 2013
By: Kelly Diamond, Publisher
If you’re reading this, then protecting your assets is likely a top priority for you… as well it should be!
Asset protection starts with privacy protection, and privacy protection starts with identity protection.
When we talk about property rights and protecting your assets, perhaps it’s worth clarifying that PRIVACY is amongst those assets. It is a bit misleading when we think about protecting our wealth because the inclination is to direct our attention to the things: money and metals. But property is an extension of our person, which entails not just the things, but our privacy — which happens to provide a considerable amount of protection for our assets.
So, how do we protect ourselves and all our extensions? Well, we do everything from locking our door, to getting a home security system, to putting our money in banks (or under our mattresses!). Privacy has become a HUGE buzz word of late, given some of the miscreant activities of the NSA, or the intrusive nature of legislation like CISPA. As well it should be. More so than ever, individuals are flocking to services like that of Tor or Cryptohippie because to not do so would be tantamount to walking around in a virtual x-ray machine!
Remember a while back when a contributing author spoke of a case where an individual refused to relinquish bank account records under the self-incrimination clause of the 5th Amendment, but that court ruled that our bank account information was a matter of public record?
If you recall, the impetus behind the Cook Islands’ trust industry was, in the late 1980’s, American tort lawyers were looking for ways to protect their doctor clients from getting buried in frivolous lawsuits. Well, an LLC can offer very similar protections for your privacy and subsequently your assets.
You store your wealth in a trust. You’ve diversified your holdings into precious metals and real estate. Perhaps you own several properties as investments or vacation homes. You have a couple of vehicles as well: one you cruise in, one that tows the family around, one that tows your boat to the lake. You have no debt to speak of except a little revolving debt on the credit cards that get paid off regularly. Basically, you’re just a comfortably successful, financially responsible, and otherwise private person.
Unfortunately, ownership of such large ticket items of value is indicative of wealth. Often times, title is a matter of public record, so if someone knows your address, they can see the liens on the property, the mortgage balance, the appraised value, and make a pretty educated guess as to what the equity is. Something along similar lines can be done with your car. There are litigious bottom dwellers looking for the low-hanging fruit. They are looking for not just liquid cash, but assets that hold value. Assets like an automobile, or equity in a home.
Someone, like an ambulance chaser, who is intent upon getting their hands on your net worth in some way stands a better chance of succeeding if everything you own is registered under your name and a matter of public record.
While there may certainly be legitimate grievances out there, there are also legitimate property owners who don’t want to fall victim to frivolous lawsuits any more than others want to become victims of a hit-and-run. Once someone finds you and ensnares you in this legal game, even if you “win”, you’re out several thousand dollars in legal fees and lawyer costs JUST to defend yourself (and your property) against the claims!
BUT…… what if YOU didn’t own those things? Better put, what if those things were not in your name? What if you had a company car? Or were renting company property? A company that YOU own.
“What difference does that make? They’ll find out I own the company and come after my car and house anyway!” is what you are probably thinking. And that would be true IF the owner of the company were also a matter of public record… but what if owner’s identity could only be discovered through a court order, and on paper, you were basically a pauper?
New Mexico is the anomaly for LLCs (Limited Liability Corporation) in the United States. In nearly every other state, LLC ownership is a matter of public record. But New Mexico doesn’t require the names of LLC owners in any publicly visible field. For all intents and purposes, New Mexico doesn’t know who the owners of their state’s LLCs are. Only two entities know: YOU and your Registered Agent. And your registered agent can only be compelled by court order to reveal you as an owner of a particular LLC. Your anonymity, and by extension your privacy, is protected from the leeches that seek to manipulate the system into sucking you dry.
Three things are required for a New Mexico LLC:
- The name of the company and the address of the principal office (an address of your choice),
- The name and address of the Registered Agent (which must be in New Mexico, details below), and
- The duration of the LLC, which can be limited or perpetual (often 100 years)
Item 1 can be in any state, the registered agent has to be in New Mexico, however. And the most practical and functional purpose of a New Mexico LLC in particular is as a holding company for large assets. It’s not meant for you to literally operate a business out of it as that would ultimately make the company more traceable to you.
There you go, a New Mexico LLC: a tool offered by the government to protect us from the folly it promotes. It won’t protect you from the government itself, of course, but it will protect you from those abusing the system for their own personal gain.