A simple asset protection strategy can accomplish a lot without complications.
September 22, 2016
By: Bobby Casey, GWP Managing Director
One of the biggest issues I find with asset protection planning is that frequently people get overly hyped up about putting some exotic structure in place that they really don’t need.
I see it all the time. People read something on the internet saying they need this special type of trust structure that will legally allow them to both protect their assets from prying eyes while also hiding from the tax department. First of all, it is likely bogus. Secondly, in many cases the structure is overkill for the individual’s needs.
The problem is, if you put some complex structure in place and fail to maintain it year after year, you risk invalidating the entire structure. When you have complex trusts instruments, insurance products, a litany of offshore and domestic companies, you end up in your own regulatory nightmare maintaining it all.
I’m a huge fan of simplicity. An effective strategy need not always be a complex one. Let me give you an example:
Earlier this week I got a call from a good friend. He runs a very successful online business planted firmly in the good ole US of A. This friend does a tremendous amount of business and was just offered a very lucrative licensing deal with a well-known brand name.
He called me to discuss ways to protect his assets and keep his name out of public record. We talked about a few different options but ultimately settled on 2 WY (Wyoming) LLC’s. Why? Simple. Wyoming LLC’s offer excellent asset protection benefits especially for single member LLC’s.
In my friend’s case we are creating one WY LLC to own his intellectual property which will then lease that IP back to his new WY LLC operating company. In this way, he can sequester his “money maker” – the intellectual property – from the operations of the company whereby shielding the IP from any potential creditor claims.
Because Wyoming does not require public registration of members or managers, neither his competitors in his existing business nor anyone else can learn who the true beneficial owner is.
My friend does not live overseas. He does not have a large amount of wealth (yet), and thus did not need a more complex, costly, high-maintenance structure to manage his business and assets. He needed something simple he could understand and manage, yet still provides him with his desired outcome.
I have another friend who recently called me and said he was looking for ways to take his name out of public domain related to any assets. In other words, he wanted to maintain his current lifestyle without publicly exposing his investments, assets, home, etc.
This guy does fairly well for himself. He owns his own small business, drives a nice car and lives in a nice house with a good amount of land. He is not interested in moving to a coastal village in Costa Rica or living as a digital nomad in Southeast Asia. He just wants to live his normal life under the radar. That’s all.
For him the plan was quite simple. We registered a couple of New Mexico (NM) LLC’s. In New Mexico, there is never any record (not even with the registered agent) of who the members or managers are of a NM LLC. If you are looking for privacy in your day to day dealings, a NM LLC may be the ideal structure for what you are trying to accomplish.
My friend proceeded to register his cars and other vehicles in the NM LLC name. He then deeded his home over into his NM LLC name as well as a few other assets. At this point he took it one step further and got a physical mail-drop address from TravelingMailbox changed his physical address with his bank, credit card company, cell phone bill, etc. to his new physical mailing address in Dallas, TX.
Voila. My friend no longer personally owned a single physical asset plus nowhere in public record where does his residential address appear. He effectively went off the grid without packing the first box or moving to a cabin in Idaho.
For the next 7 days, I am offering you a $200 discount for registering a WY and/or a NM LLC with us. If you click on either of these respective links below:
….and use the following coupon code – clownshow – you will automatically get a $200 discount on our LLC packages at checkout.
We provide a full service LLC package that includes all state fees, filing of all required documents, registered agent, registered agent fees, registered address, and our own proprietary operating agreement drafted purely with asset protection in mind.
Just for fun I used the coupon code “clownshow” as a little reminder about the 2016 US presidential election.
Until next time, live well.