Transcription
Would you like to learn how to make your assets invisible to creditors and snoops? Well, in this video, I'm going to show you exactly how to do that with many of the assets that you currently own. Put them in a place where no one will know that you hold on to these types of assets. All right, let's get started.
Okay. So in this video, we're going to go through is I'm going to show you how to hold your personal residence, your bank accounts, your brokerage account, your investment real estate, and various types of entities that will create a cloak of invisibility around your assets. And what do I mean by that? That if a creditor or anyone that was just decided to run an asset search on you, unbeknownst to you, would not be able to determine that you hold title to this asset.
Now, you're probably wondering, why do I need invisibility when it comes to holding titled assets? Well, it's really simple. Number one, if somebody was considering bringing an action against you, a lawsuit, one of the things that the attorney may do ahead of time before they file their claim is do a little background research, see if you're worth suing. Does this person have assets? Do they have something to lose? Because I know that it's a mental game in a lawsuit. And if you have something to lose, then you're probably going to be more willing to settle for something rather than potentially losing everything. So we want to change the tables when it comes to someone bringing a search. You're looking for my assets. And then drawing that conclusion that, yeah, this guy is definitely worth going after.
The second reason why this is important in becoming invisible. Because if somebody does happen to get a judgment against you, let's say there's a lawsuit that's filed against you. You're not made aware of it. A default judgment is now entered against you. And I've talked to plenty of people where this has happened. They can say, hey, I was served in or I was sued in New York. I never got served. They get a default judgment against me. And then once they have that default judgment against me, they go and they freeze my assets. Now, why were they able to do that? Because the individual that had this default entered against him, he owned things in a way that were easily traceable back to him. So, so this creditor could go and then grab the assets. Now, could you set that aside for failure to provide me notice? Absolutely. But that's after the fact that you find out about it when your assets have been taken or seized. So it makes it much more difficult for you to fight that battle, because now it's an uphill battle. It's not trying to keep your assets. It's trying to actually get your assets back. And so what we want to do with our planning is let's make them invisible so people don't know that we have them. And at the same time, if they do get a judgment against me, they don't know where to go to collect on that judgment.
So what I want to do is break down some of these assets and show you to real quick here on how simple entities can provide maximum protection from an invisibility standpoint. Okay. So what is the first thing we will talk about here? Your personal bank account. Personal checking. Okay. Not your savings account. Savings account. We'll discuss that in a minute. But your personal checking account. So most of us have a personal checking account in our own name. Your checks will have your name on them, and that's fine. Great. You know, you have to write checks. They have to clear and and you want, you know, people to know that they can accept this check when it's coming from you. But the problem is, is how the account is titled. It's not how your checks read. Right. I can have a check right here that says Clint Coons on it. Okay. And then my address right down here. And if I go to negotiate that check, they check my ID and they accept it. But that doesn't necessarily mean that the account that this check is drawn on has to have my name on it as well. Okay. Because if it has my name on it and it's using my Social Security number associated back to that account, then I've put this account at risk. Meaning if somebody gets a judgment against me, they can file what is referred to as a writ of garnishment on my bank. And what that does is it tells the bank, hey, I'm a creditor. Clint owes me money up to this amount. If you have funds up to this amount in an account that is in his name, then you pay him to us. And if you don't, then we'll sue you and you're liable to us. So banks will automatically freeze your accounts in this scenario when they're held in your name.
So here's how we defeat that. The way you protect your personal checking account is you set up what is referred to as a privacy banking trust. Okay. So we want to create this trust here to hold our personal checking account. Now when we set up the trust, we're going to come up with just any name you can think of. It does not matter here. There's no magic to this. I'll call this the Pickle Trust. Okay. That's all right. That works. But, you know, it'd be kind of weird if Pickle Trust showed up on my my checks. That's why I said your checks will continue to read the same. So you set up your trust, pickle. Trust. Clint, trustee of this trust. So you'll be the trustee of your trust. You'll be the beneficiary of your trust. So once you've drafted the trust, then you'll obtain a EIN number for the trust. So that's really important as well. You have to have an EIN. You see when people tie their Social Security numbers to their financial accounts, they're just leaving them exposed to garnishments. And it's a problem that I've seen time and time again. Whenever I speak to someone, they say, yeah, they froze my account. Oh, was your Social Security number tied to it? Yes it was. Well, that's how it happened. So for your personal checking account, put it in a privacy trust. We'll call this a pickle. Trust with an EIN and it does not have to file a tax return, by the way. So we'll set it up with an EIN and you're the trustee now. Now that account is hidden. It's moved out of your name. It's in the trust name. Still, your funds does not change your taxes one bit. Does not have to file a tax return, but you have that privacy. Okay. So that's your personal checking account.
So let's now talk about a different asset. What about your savings and your investments? Okay. So when I talk about investments, what we're referring to would be your stocks. Okay. If you have a brokerage account that's in your personal name, anything that you have that I would look at as being kind of a safe asset that you're not going to be sued for, but you're going to be sued to get meaning it doesn't create liability for you, but somebody's going to come after you and they're going to want to take these things from you. So, so savings and investments. All right. So what we have to do there is again, we have to establish an entity to get those out of your name. But we also want to set it up in a way where the entity itself does not relate back to you. Meaning let's say assume that I created a limited liability company here in Oregon. Right? When I file that entity in Oregon, this LLC, my name will be associated with it. So if someone was coming after me, they could run a search if they went to open corporate.com. If you went to open corporate.com, you could put in my name search for manager or officer of any entity in the United States. And if I set up this LLC, my name will show up there and my personal address. So then a creditor that's doing a background search on me would then have some semblance of what I own, because the businesses that I formed, the LLC, is in my name. So we do not want to set up our structures that hold our savings and our investments in an entity that relates back to us. That's why for these types of planning, what we want to do is we want to set up a Wyoming limited liability company. Now I'm choosing Wyoming over some of the other states, namely New Mexico, because people bring that up quite a bit. Hey, why not set up in New Mexico? I heard it's less expensive there. The reason why is asset protection, because not only are we setting up a structure to provide anonymity, we also want to set up a structure that protects our assets from individual creditors because assuming let's say they're doing an asset search, they can't find any assets. But hey, I've got nothing better to do for the next two months because I have no new clients. So I'm just going to take this one on and just go after this guy. We'll see what shakes out. Well, I want to make sure that even if they're successful, that they still can't collect. So I'm going to choose entities that not only hide my assets, make me invisible, but they also protect my assets as well. So this is one of those entities that will do that. Wyoming. Why is that? Because in Wyoming, when you set up an LLC, Wyoming does not collect information on who the members or managers are of this limited liability company. So when you're setting up your Wyoming LLC, it's best to always use a third party like Anderson to set your company up. Oh, shameless plug there. But the point is, is that when we set up our Wyoming LLCs for our clients, none of our clients personal information will show up on the filing. We come up with a name for this. We're going to call this one, Crazytown, LLC. We'll give it a virtual business address so it's not related back to our clients address. We'll obtain an EIN number for it as well. That's key. You got to get the EIN. And then Anderson is a registered agent. And we're the organizer. So if Suzy set up this limited liability company through us, we set up Crazytown for her. And then after that account or that LLC is set up, she then will take her savings and her investment. So let's say she has a savings account with Wells Fargo. So go down to Wells Fargo. She'll say, I have Crazytown LLC, that I've set up. Here's the EIN. Here's my operating agreement, because you're gonna have to show them your operating agreement. I'm the manager. I'm the member of this LLC. I need to open up a checking and savings account under my limited liability company. So once she's done that, then she'll take her personal savings and she'll move that personal savings account into this LLC. Now, she'll do the exact same thing with her broker. So, for example, if she has a brokerage account with Charles Schwab or some other broker out there, she will reach out to the broker and explain to them that she needs an application for a limited liability company account. And so then after she obtains that LLC account, you complete it, and then they'll open up a brokerage account in the name of the LLC. Now your brokers are understand how to do this. I just recently opened up a new trading account with J.P. Morgan, and I went through the exact same process, where I showed them my limited liability company, completed the LLC account application, and then I had an account opened. So now she'll be able to move her investments. Then we'll roll over into this account. And so now everything is held inside of Crazytown and Crazytown does not relate back to her. So now we've made these assets now invisible. So savings and investments really simple to do. Crypto would go into this account as well. Make them invisible with a Wyoming limited liability company. Now if you wonder about Delaware, yes, Delaware works as well, but it is more expensive. Do not use New Mexico because in New Mexico the LLCs do not have strong charging order protections. Which means if you got sued and somebody comes after you, they could go after your New Mexico LLC and obtain your savings and your investments. That's why I'm choosing Wyoming for the asset protection. Okay.
So another asset that we have here that's important to make invisible. How about your personal residence? All right. So with our personal residence, if we want that to become invisible, there's really two ways we go about doing this. Okay. So the first way we look at it is that does your personal residence have a mortgage? Okay. If the answer to this is yes, it does, then what we're going to do for our personal residence is we will create a residence trust for your personal residence. Now, a residence trust, if you're familiar with land trusts, they're kind of the same. However, there are differences in the provisions of these trusts. I see a mistake that is made by individuals who have watched my videos, and maybe they're working with one of those internet entity mills and they say, oh, yeah, we can do a land trust. And they basically put their personal residence into a land trust. And they don't realize that in using that type of trust, many times when you set it up that way, you've messed up your homestead exemption. You do not want to jeopardize your homestead exemption. When you transfer a property into a residence trust, you want to ensure that you maintain your homestead exemption, you maintain your mortgage interest deduction, and you maintain your 121 capital gains exclusion when you sell the property. So we draft the trust specifically to make sure all of the favorable tax characteristics associated with a personal residence are not jeopardized. So now the property here, what we're going to do, we've got our personal residence. It has a mortgage on it. Now, why is the mortgage important? Because we don't want the lender to accelerate the mortgage when they see that it's been transferred. So transfer it into a trust prevents that from occurring. So we set up our residence trust and we'll call this one the Fuzzy Trust. Okay. So we set up the Fuzzy Trust. Then we will deed the property into this trust. Now when you deed the property, always use a warranty deed to move your property. Never use a quitclaim deed. Very important here. From from the from the aspect of someone looking at this overall transaction and not being able to sniff it out based upon the deed that you use. Quitclaim deeds should not be used here. So if this property was owned by Ben and he's going to move it into the Fuzzy Trust, the way this provides Ben anonymity is Ben has to use a nominee trustee. Okay. So when the trust is set up, you pick a nominee trustee. And that is someone who is going to serve as a trustee of your trust to to take title. Now, when I bring this up, oftentimes people then pull back and they think, well, I'm not going to transfer my property to someone else's name. I lose control of my house. They'll take it from me. No, that does not happen because the trust clearly spells out the control the trustee has over that asset. And if you've set your trust up properly, the beneficiary in this case, Ben, who owns the trust, has all the control. The trustee is there in name only. And I'd also recommend you always use an attorney. We've used I've been on countless trusts for the past 25 years for our clients, tens of thousands of trusts. I've been listed as a trustee and we also use now, actually my son, who's an attorney, he serves as the trustee. Now, he's taken over that role for me. And what happens is that when we are clients, deed property into the name of the nominee, trustee, it would be deeded. Let's say I was serving their client, Koons, Esquire, trustee, misspelled that trustee of the Fuzzy. I'll just put FT. Fuzzy Trust just like that. So the property would transfer from Ben's name to Clint Coons as trustee of the Fuzzy Trust. Okay, great. So what does that mean? Means if somebody looks at title and they're saying, does Ben own the assets? They're not going to find this asset in Ben's name. It's going to be listed under my name as a trustee. But here's what's critical here. This is what you need to do when you do this and you go through this transaction. I'm going to resign my position immediately. And inside of the trust document, it states that when Clint resigns, Ben is trustee. But no one knows this because this trust is not recorded anywhere. It's a private document. The only thing that shows that this trust is even in existence is what's untitled. The Fuzzy Trust exists. It puts the world at large on notice. Hey. Yeah, Ben or not? Ben, somebody created the Fuzzy Trust. We don't know who the parties are. All. We know who the trustee is, and it says Clint, but Clint resigned. And so when I resign my position, Ben becomes the trustee. Now, if you go through this process to do what I'm explaining here, make sure if you're not using us to set it up and you're using a third party, be careful here, because I've talked to several individuals that have informed me when they use someone else to be their nominee trustee in order to get them to resign. They wanted to charge them. They wanted to stay on and charge them with just an annual fee to be their trustee. And then if they wanted to resign, they wanted to hold them hostage and charge them another fee. That should not be the way it works. You need to be explicit at the outset. Hey, I want you to serve in this position. I want you to resign immediately and then transfer title back to me via a trustee's deed. So key, make sure you always get a trustee's deed from your nominee trustee. And what is that? It's a deed that you can record to put your name back on title as a trustee of this trust. So whenever I serve as a trustee, when I resign my position, I give my client a trustee's deed. It says Clint Coons is trustee, hereby deeds the trusteeship over to Ben. And so now Ben can take that document that I've signed up, notarize it. He can go down to the county recorder when he's ready to remove my name and the anonymity shield and put his name up there. Why would he ever do that? I don't know, maybe he wants to sell the property. And so in that scenario, if he's selling the property and he has no claims against him, it's just going to be easier to sell. But you might be asking, why would you want to go through this process? Well, the reason why we do this is one, I don't want people to know where I live. Privacy. Second thing is, if somebody is looking at me to bring a claim against me, I don't want them to know how much equity I have in my house. Okay. So it's defeating possibly a lawsuit before it gets started. A shakedown case. And thirdly, if somebody does sue me and they get a judgment against me, here's how judgments work. If I had a judgment against Ben and I knew Ben lived in Pierce County, then what I would do is take that judgment and record it in Pierce County. I just record the judgment against Ben and the judgment then would look and say, oh, Ben is on title to a piece of property here at 732 Olive Lane. Therefore, now that judgment against Ben is going to stick to that house. So that means it's a lien on the property. So if Ben tries to sell or refi, the creditor gets paid. But if the property is not in Ben's name, instead it's in a trust that Ben lives in the property, but he's not listed on there as a trustee. That judgment is going to hang out there and it's not going to stick to the property. So in that scenario, if that were the case, then Ben, obviously if he wanted to sell or he tried to do want to do a refi, he's not going to want to put his name back on title, because then all of a sudden that judgment would attach. And so I've helped clients in a few situations where we've sold property or refinanced property in their trust. And I was serving as their trustee. They just reappointed me as trustee to go through this process. Now, I never touch the funds that go into the trust account that the, the, beneficiary had opened up. But I'm serving there just to sign on behalf of the trust to finalize the transaction. So that's one of the benefits. You know, when you're working with Anderson, you're going to be able to take advantage of those types of services. They're included when we set up these types of trust documents for our clients. But the personal residence trust, the residence trust is a phenomenal tool for your personal residence. Okay.
So this is going to be a great video here. We got some something else to talk about. What about investment real estate? Okay. How do we make our investment real estate? Oh wait. Let me back up. There's another example here I, I wanted to share with you. Okay. So number two, another strategy here. If your property is paid off. Okay. So if your personal residence is paid off, here's another strategy you can use for it. If you don't want to use a trust, set up a Wyoming LLC that is disregarded for tax purposes and then place your property into the Wyoming LLC. Now, why am I saying Wyoming? Let's assume that you live in, Utah. Well, how would I use a Wyoming LLC to own property in Utah? I think I thought it had to be filed there. If you're not renting the property, if it's not conducting business in Utah, which a rental property obviously is, then you're able to use a Wyoming LLC to hold title. But what's critical is that it must be disregarded. Now, why am I using Wyoming? While I'm using it for the same reason I set up the investment account in a Wyoming LLC because Wyoming LLCs do not have my name associated with them, so it gives me absolute privacy. If somebody looked up on title who owned who owns this house, it would have a Wyoming LLC name on title. It would no longer have my name. And again, if you set it up as a disregarded entity for tax purposes, you still maintain your 121 capital gains exclusion when you go to sell. Now, what you do risk here with this strategy is your homestead exemption. So if you live in a state with a sizable homestead exemption, use the residence trust. Don't use this tool. But if you live in a state that has a modest homestead exemption, you may want to consider using a Wyoming LLC to hold title to your property, because I feel that that's a better protection tool than the minimal $80,000 or $150,000 homestead exemption your state may afford you.
Okay, now we'll get on to the investment real estate. So what about investment real estate? Investment real estate. So this, if you watched any of my videos, then you know where I'm going with this. So with investment real estate, it's a whole combination of things. But the most important thing is you have a Wyoming LLC down here. This is your primary entity. This is your block or this is your as your anonymity, your asset protection. It's all tied up into this one entity. And so what we're doing here is whenever we create limited liability companies to hold our rental properties like this, we're always setting these LLCs up so they point down to this Wyoming LLC down here, meaning that if I created this LLC here in Utah, all right, it was a Utah LLC. On the filing itself, I will state that Blessings LLC, this is the one I set up in Wyoming, is the member manager of this company. So if you, if a tenant or if an attorney for a creditor looked at this LLC here, they would see it's owned by this LLC down here. If they pull up this LLC, they find out nothing for the reasons I've already explained. So when you're dealing with investment real estate, rental properties, we will set up structures. You should set up your structures like this. So all of your rental LLCs are held by one Wyoming limited liability company to mask the ownership. So people don't know these are your companies. Now, there are some other tools we look at here. Maybe we use a land trust depending on if the property has a mortgage on it, or if there's a transfer tax issue we have in taking that investment property from our own name into the LLC, maybe in those situations where we're putting it into a land trust first and then that's going into an LLC. But whatever mechanism we use to get this structure, putting into place into effect, you'll see that this is the one that's giving you the anonymity. So you can have a portfolio of over 70 properties. And if it's structured properly, the tenant or an outside creditor would never know that you own all these assets because your name would never be associated back to them. So for investment real estate, this is the type of structure we'd be looking at.
How about your business? Let's talk about this one. This is the last one we're going to cover. What about your business? If you have an active business now with active businesses, if you're not associated with it, your personality isn't that isn't associated with the the business, for example. Anderson. Right. I'm associated with Anderson. I'm a founder of Anderson Business Advisors with my partner Toby Mathis. So people know this is my company that I said it, I started it with Toby. It would be really odd to say, set it up in a way in which if you looked it up online, you wouldn't see my name there, because I hold myself out. I tell everyone I'm the founder with Toby. So for me, this doesn't this doesn't work. But when I've opened up other companies, like, for example, back in 2003, we created a mortgage company. When we opened up our mortgage business, we set it up because we're not associated with it, weren't we didn't need our names on it. We didn't want people to know that we're the owners of it. We set it up with anonymity. How did we do that? So we set up a mortgage company like this in Las Vegas. This is our mortgage, LLC. Let's call this one Green Point Funding. So we set up Green Point Funding, LLC. Now the owner of Green Point Funding, LLC, we set this one up as an S Corp for tax purposes. Then the owners, we set up two separate LLCs down here, two Wyoming limited liability companies as follows. Where Toby was the owner of one of them and Clint was the owner of the other one. So if anybody looked at this limited liability company here to determine who were the member managers of this LLC, it pointed to these two LLCs down here, which let's say we owned at 50/50 just like this. They would not know that we were the ones actually involved with that company. I didn't want people to know that. I didn't want them to draw that conclusion. All right. This was a side business, side gig that we had had set up, run it independently, had its own employees and managers in that company. They ran it. We just owned it. So in that situation, if you have a business and you desire privacy, then you explore setting it up. Something like this. Now, what's key here is this was set up as an S Corp. That is why we had to use two separate entities to hold title, both of these being disregarded LLC LLCs getting into the weeds here. But the reason I'm telling you this is that if you want to go out and protect your existing business and get your name off as far as being listed as an owner, do not do this on your own name. Talk to a CPA, call us, set up a strategy session with us and we can show you how we can take your existing business and provide anonymity for it.
So it all comes down to this. Let's get in front of those creditors, make them think that we're not worth going after. And the way you do that is to appear invisible, that you don't own anything. Because I know from experience, having worked on the other side, when I was in law school, I worked for those attorneys that went after people for personal injury. They only wanted to either get the insurance or go after the people with the deep pockets. My goal now is to make sure you don't look like you have deep pockets, even though you do. Guys. If you like this video, be sure to hit the like button. And as I stated many times in the video, if you'd like to set up a free strategy session with us to analyze your situation and show you how to use these same techniques to become invisible, there is a link in the show notes that you can click on that will set up your free strategy session. Take care.