ASSET PROTECTION STRATEGIES SECURE ENOUGH TO SCREAM, "SO SUE ME."

Asset protection strategies reduce risk and limit your personal liability.  Don't own anything in your name, especially real estate because it's the most fought after asset in recovery lawsuits.  Many investors work hard to amass an investment portfolio and build a business, only to have it ripped away from them due to their inability to shield it from predators, lawsuits and the prying eye of the public.

Who needs asset protection?

Beginning, Intermediate, & Experienced Investors.

All the money in the world can't buy peace of mind, only asset protection strategies can.  They effective accomplish 6 goals:

Asset Protection Strategies get the highest level of security, privacy and tax savings for both you and your real estate investing business without giving up control



Maximum Personal Liability Protection

Business Maneuverability

Privacy

Tax Benefits

Low Audit Risk

Probate Pass Thru



Some would say to simply add an umbrella insurance policy to your asset protection strategies. Yes, this is fine but keep coverage to a minimum. If you look like you have insurance to cover a lawsuit then you position yourself as a potential target.

And what if you submit a claim to your insurance company and it is denied?
Wouldn't you love to know that your assets are securely protected by your company structure and trusts?


CYA ASSET PROTECTION STRATEGIES

Together C corporations, LLCs, Land Trusts and Family Limited partnership Trusts are a total protection package.  By combining strategies, you'll get the highest level of security, privacy and tax savings for both you and your real estate investing business without giving up control.

Plus, these asset protection strategies present your business with a legal and transferable position that can smoothly be transitioned to a purchaser or bequeathed to your heirs (almost always) without taxation.

    C corporation is the first layer.  It's viewed as another entity under the law, separate from you, even though you still control its activities.  By forming a corporation you'll lower your risk of an IRS audit.  And the tax write offs are generous, you can deduct expenses like medical bills and child care.  Also all REI resources and educational materials.

A corporation establishes you and your company in a serious business role. And it'll increase the opportunity for raising capital to buy properties and grow your business.  Two weeks after creating a C corporation,  Experian will automatically have a credit file for your investment company.  

Get the details about C corporations here.


   Limited Liability Corporation (LLC) is the second layer.   The LLC  goes the extra mile and gives investors the greatest flexibility, with hassle-free maintenance and is recognized as a pass through entity which eliminates double taxation.

An LLC creates the opportunity to partner with someone on a deal without giving them access to your complete real estate business. This is especially good for short term JV investments. 

However, avoid a single member LLC because it can be pierced easily, exposing your personal assets.   If you need a second member use a spouse or another entity like a C corporation (which we prefer) that will automatically give you more privacy and limited liability.  Get more LLC detail here.

It's important that your C corporation or LLC never own any business assets because the assets are not protected due to their charging order.  This is why it's important to use multi-layered strategies and add Land Trusts and Family Limited Partnership Trusts to your plan.


   A Land Trust is the third layer.   These trusts are valuable because they hold your properties so that no one can have access to them if your company is sued.  Many times company assets are frozen but if a land trust owns the investments in your company you'll be able to continue business as normal, buying and selling without any interruptions. 

Land trusts also keep each property separated.  So if you were sued and you lost, they could only get the one property in the land trust. All your other business investments and personal assets would be safe and secure.

Get the details about Land Trusts here.


   Family Limited Partnership Trust (FLP) is the final layer.  This is the layer that gives you probate pass through to your heirs without inheritance taxes.  And it'll pass your assets through automatically without a ton of paperwork.

Plus, your FLP creates a charging order protection.  Basically, that means if you, personally or your company is sued and lose then the winning side cannot collect the judgement.  It sounds complicated but it's not. 
Find out all the details about FLP trusts here.

Besides insulating your assets and become judgment-proof with limited creditor remedies your family limited partnership trust will give you certainty. There may be times when your deposition will be taken.   If your asset protection strategies are correctly in place you'll be able to honestly answer the questions while keeping your assets fully protected.


ASSET PROTECTION STRATEGIES WITH LEVERAGE

Asset protection strategies don't need to be complicated to work. A clever and almost automated form of protection can be created out of debt.  By keeping your properties mortgaged to 95% of their value, you have already taken out the equity.  There isn't any money here if your assets are checked.

This is our favorite part- say you want to payoff your properties and have no debt. Investors can create a separate company that lends money and holds the mortgages on all your properties.  This will form a structure of debt with your "finance company" having liens in first position. Your properties and company cannot be reached by claims from others. Plus, you get to put all the equity from the property in your pocket; tax free and you get to keep the property. That's tight asset protection strategies working at their best.

And the interest on the mortgage can be written off on your investment company's taxes.

The "finance company" can also loan money to your C corporation for business purposes and to other investors.

Your financial security is one of the essential elements for building success.
Now is the time to CYA, cover your assets and get all legal on it.

In summary, the best asset protection strategies enable you to
"Own nothing and control everything"- Nelson Rockefeller



Asset Protection Strategies to Land Trusts







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