Keys to Asset Protection, with Douglass Lodmell
Should you be concerned about asset protection? What types of risk should you know about? What you don’t know about protecting your assets CAN hurt you. In this episode, we’re talking with Douglass Lodmell, one of the nation’s leading asset protection experts and founder of Lodmell & Lodmell about asset protection and how it works. https://youtu.be/d173g5beiU8 So if you want to learn about the keys to asset protection, why insurance isn’t enough, and how to protect real estate, other physical assets, securities, and liquid assets … tune in below! Table of contents Where Asset Protection Fits into Your Cashflow Creation System How to Keep Your Wealth What is Asset Protection? LLCs and Limited Partnerships as Asset Protection Setting Up Your LLC Misconception of LLCs The Next Level of Asset Protection Asset Protection Trust Fraudulent Transfer About Douglass Lodmell Contact Douglass Lodmell Where Asset Protection Fits into Your Cashflow Creation System Protecting assets with legal planning will maximize your peace of mind. But it’s just one small step of a greater journey. That’s why we’ve put together the 3-step Entrepreneur’s Cash Flow System. The first step is keeping more of the money you make. This includes tax planning, debt restructuring, cash flow awareness, and restructuring your savings so you can access it as an emergency/opportunity fund. This step frees up and increases your cash flow, so you have more to save, and consequently, more to invest. Then, you’ll protect your money with savings, privatized banking and legal protection. This is where estate planning fits in. You’ll know that no matter what happens to you, your wishes will be carried out, your assets will remain intact, and your wisdom will empower generations after you. Finally, you’ll put your money to work and get it to make more by investing in cash-flowing assets to build time and money freedom and leave a rich legacy. How to Keep Your Wealth Once you’re wealthy, the trick is to stay wealthy. One of the number one reasons that a person’s wealth comes crashing down is a lack of proper asset protection. Unlike other countries, the United States is very litigious. To put it bluntly, people don’t sue the poor, so you have additional risks to mitigate when you build wealth. Douglass Lodmell, of Lodmell & Lodmell, is one of the nation’s leading asset protection attorneys. His firm handles $4 billion worth of assets. He shares with us the pyramid of asset protection, and why it matters. What is Asset Protection? Asset protection comes in many forms. If you don’t have any assets, that’s asset protection. Similarly, having assets that are exempt from creditors acts as protection. For example, you could have a $15 million home in Texas, and $100 million in debt, and no one could touch your home because of Texas’ homestead exemption. Another protected asset? Retirement funds, because under the ERISA (Employee Retirement Income Security Act), the government decided not to allow people to lose retirement money through lawsuits. Otherwise, the burden would be back on the government. True protection begins with a review of all your assets. Then you can identify what’s exempt, and where to strategize. Asset protection strategies take your assets back off the table and away from creditors and lawsuits. Life Insurance as Asset Protection Life insurance is another asset that typically falls into the exempt category, however this varies from state to state. In some states, your entire policy could be exempt from creditors, while in other states, only a portion is exempt. When you’re looking to protect your life insurance, first you must look at your state. If you have 100% exemption, you don’t need to do anything else. If it’s not, then you look for other ways to protect it, either through holding companies or directly into asset protection stocks. LLCs and Limited Partnerships as Asset Protection Limited partnerships and LLCs have charging order protection. They protect assets because creditors cannot foreclose on a limited partnership and get the underlying asset. All they can get is a charge, which you can think of as a lien against the debtors interest in that limited partnership. This is the foundation of an asset protection strategy. Setting Up Your LLC When setting up your LLC, you must consider jurisdiction. If you do not establish your LLC in the jurisdiction where you’re investing in, it has no value. For example, you wouldn’t invest in California real estate, and then set up your LLC in Wyoming because you like the statute better. Otherwise, if you get into trouble in California, California law applies to your case. You’ll just end up paying more fees. LLC is great for most assets, especially real estate, which reduces your liability as a landlord and protects the value of a property. Your inside liability is protected to a certain amount through an LLC, which is why you must appropriately spread your properties under different LLCs. The distribution depends on your risk tolerance. LLCs also protect from outside liability, or events that don’t occur directly inside the property. Other assets you can put under an LLC? Rare and expensive cars, boats, planes, and other similar assets. Misconception of LLCs A common misconception is that you must have an LLC for every property you own. However, this only really applies to inside liability. If you own an LLC on every property, you’ve just created more paperwork and more fees for yourself. Instead, consider separating properties under LLCs based on equity value rather than property number. That way, instead of 12 LLCs for 12 properties, you’re more likely to have one or two LLCs. Of course, it’s important to refer to your jurisdiction when making such decisions. The Next Level of Asset Protection LLCs are like the base layer on the pyramid of asset protection. The next layer is a holding company that contains all of your LLCs. While the base-layer may comprise single-member LLCs, you’ll want to have a multi-member LLC at the holding company level. This is also where you do get to choose your jurisdiction for your holding company. Good jurisdictions include: Nevada, Wyoming, Delaware, Arizona, and Alaska. These states are much better at protecting assets. Asset Protection Trust After the holding company, you have the third and final layer: the asset protection trust. Sometimes, the holding company may be enough to cover all of your assets. $600,000 or less in assets means you can probably stop at the holding company layer, with significant umbrella insurance. Once you go upwards of $1 million, those entities may not be enough. That’s because your assets may block a creditor from foreclosing on the asset, but they won’t eliminate the creditor. They can still get a lien or charge against the holding company. To eliminate the creditor, you’ll need the asset protection trust. This trust, set up with special provisions, blocks creditors from reaching assets within the trust. It’s also called a self-settled trust, which means you’re creating the trust for yourself, and you’re the beneficiary. In order to keep these assets safe from creditors, you must also make the trust irrevocable. That way, you cannot reverse the trust and put all assets back under your name and within your creditors’ reach. Otherwise, a judge could compel you to reverse your trust. Fraudulent Transfer Fraudulent transfer doesn’t refer to a physical move. It refers to legally transferred titles. If you sign your house over to your brother right after losing money in Vegas, that’s a transfer. However, because it’s done with the intent to delay, hinder, or defraud a creditor, it can be reversed. In some cases, it doesn’t even matter if the event has occurred or not. If there’s mold on a property, and you fear you’ll be sued and make title transfers to protect yourself, the courts can interpret that as a hindrance. The trick to asset protection is that you have to do it before anything happens, otherwise it can be fraudulent. You must protect assets before you have a creditor, so that in the future no one can say you’re dodging a specific event. Douglass’ philosophy is that as soon as you need your first LLC, you should build your asset protection structure. Be cautious of a do-it-yourself protection plan. It’s an extremely complicated structure, and it’s too easy to make your assets work against you. Even calling and getting an analysis can leave you better off. About Douglass Lodmell Douglass Lodmell is Managing Partner of Lodmell & Lodmell, P.C., one of the nation’s leading Asset Protection Law Firms. Originally from Geneva, Switzerland, Douglass stood out at an early age as one of the brightest minds of his generation. His capacity to make the complex simple allowed him to excel during law school, receiving the Jacob Burns Medal, an award given to the single student with the highest GPA. He completed his Legal Masters (LL.M.) in taxation at the nation’s leading tax program, New York University School of Law. Today, Douglass’ law firm protects over $4 Billion in client assets. Douglass spends much of his time teaching, speaking, and leading thousands of business owners, corporate executives, investors and other professionals who have often worked most of their lives to accumulate wealth of various types, including real estate and securities. Douglass is also author of the book The Lawsuit Lottery: The Hijacking of Justice in America. Contact Douglass Lodmell Lodmell & Lodmell 800-231-7112 email@example.com Organize Your Finances or Get Life Insurance Today Do you want to use Privatized Banking, alternative investments, or cash flow strategies to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We would love to help you. Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/. By the way, to find out more about how Privatized Banking gives you the most safety, liquidity, and growth … plus gives you the ability to have your money do 2 things at the same time, boosting your investment returns. Go to https://privatizedbankingsecrets.com/freeguide to learn more.