I'm trying to find a way to protect my personal assets from professional lawsuits. I am not allowed to use an LLC or anything similar for this purpose, given the nature of the work.
I'm having a difficult time finding the appropriate person/professional to consult, and there also seems to be a lot of misinformation on the topic.
Does anyone know what type of professional I would discuss this with? I'm happy to pay for the service, I just want to make sure I get accurate information.
Asset Protection
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Asset Protection
"All men's miseries derive from not being able to sit in a quiet room alone."
Pascal
Pascal
Re: Asset Protection
I haven't updated my blog in a while but here's some basic articles I wrote up last year:
http://www.bbbfinance.com/?p=79
My advise is the following:
Do you have under $500k in assets?
If yes then max out 401ks, IRAs and other retirement vehicles. They are protected from creditors by the government. Put 25% of your assets into gold coins. There's innate creditor protection in holding gold coins as creditors may not know they exist and thus you look like less of a target. Put equity in your home if it's in a state that allows protection. Same for annuities. Put 6 months living expenses in physical paper cash somewhere. Again, hidden from creditors. If you have under $500k, and have been contributing to a 401k/IRA all along, then you likely have hidden or shielded 90%+ of your assets.
If you have over $500k then hire an asset protection attorney. It will be expensive. That's why I say over $500k. You will likely spend a minimum of $10k and likely around $100k to set up protection. There's some cool things you can do with forming your own life insurance company, but you're going to drop around $100k doing it. If your net worth isn't upwards of $5M it won't be worth it.
I'd also suggest getting $2M to $3M in umbrella insurance. Not only does it work to reduce liability against you, but for purposes of asset protection, it counts as assets when determining solvency and whether you have illegally tried to shelter assets. i.e. you can't put 100% of your money in creditor protection without looking guilty and risking the judge to reverse transactions. However if you have $3M in umbrella insurance, then that $3M counts as seizable assets and you won't look like you've tried to hide everything.
Professional help is good, but it's expensive and only worthwhile when you have very high net worth. Don't be under the illusion that you can give an attorney $500 to form a trust, shift your assets into it, and be protected, because that won't do shit. You can certainty do it, and tons of attorneys will take your money to form a trust but it will be instantly pierced when you sit in front of a judge.
A good asset protection plan looks like a story that isn't about asset protection. Either do it within the bounds of the law (401k/IRA, home equity, gold coins, physical cash) or set up complex vehicles that cost tens of thousands of dollars. There's no middle ground.
http://www.bbbfinance.com/?p=79
My advise is the following:
Do you have under $500k in assets?
If yes then max out 401ks, IRAs and other retirement vehicles. They are protected from creditors by the government. Put 25% of your assets into gold coins. There's innate creditor protection in holding gold coins as creditors may not know they exist and thus you look like less of a target. Put equity in your home if it's in a state that allows protection. Same for annuities. Put 6 months living expenses in physical paper cash somewhere. Again, hidden from creditors. If you have under $500k, and have been contributing to a 401k/IRA all along, then you likely have hidden or shielded 90%+ of your assets.
If you have over $500k then hire an asset protection attorney. It will be expensive. That's why I say over $500k. You will likely spend a minimum of $10k and likely around $100k to set up protection. There's some cool things you can do with forming your own life insurance company, but you're going to drop around $100k doing it. If your net worth isn't upwards of $5M it won't be worth it.
I'd also suggest getting $2M to $3M in umbrella insurance. Not only does it work to reduce liability against you, but for purposes of asset protection, it counts as assets when determining solvency and whether you have illegally tried to shelter assets. i.e. you can't put 100% of your money in creditor protection without looking guilty and risking the judge to reverse transactions. However if you have $3M in umbrella insurance, then that $3M counts as seizable assets and you won't look like you've tried to hide everything.
Professional help is good, but it's expensive and only worthwhile when you have very high net worth. Don't be under the illusion that you can give an attorney $500 to form a trust, shift your assets into it, and be protected, because that won't do shit. You can certainty do it, and tons of attorneys will take your money to form a trust but it will be instantly pierced when you sit in front of a judge.
A good asset protection plan looks like a story that isn't about asset protection. Either do it within the bounds of the law (401k/IRA, home equity, gold coins, physical cash) or set up complex vehicles that cost tens of thousands of dollars. There's no middle ground.
Last edited by TripleB on Sun Jan 22, 2012 2:58 pm, edited 1 time in total.
Re: Asset Protection
TripleB--TripleB wrote: A good asset protection plan looks like a story that isn't about asset protection. Either do it within the bounds of the law (401k/IRA, home equity, gold coins, physical cash) or set up complex vehicles that cost tens of thousands of dollars. There's no middle ground.
Thank you very much for that information.
It seems true and and very reasonable. I especially like that last part (quoted above).
How do gold coins work in a situation where you owe a creditor after a lawsuit? Same question with physical cash.
If you lose a lawsuit, do they ask you what your assets are, or is there some other way they go about determining what your assets are and how you're going to pay?
For the record, I don't have any pending lawsuits.
Last edited by AdamA on Sun Jan 22, 2012 4:29 pm, edited 1 time in total.
"All men's miseries derive from not being able to sit in a quiet room alone."
Pascal
Pascal
Re: Asset Protection
I just realized the links to part 2 and 3 are broken. I really haven't done anything with my blog for 6+ months. Eventually I'll relaunch it.
For now, check out these direct links to parts 2 and 3 where I answer your question you just asked.
http://www.bbbfinance.com/?p=82
http://www.bbbfinance.com/?p=85
The short answer is that if you do not look like a viable target for a lawsuit, then you won't get sued by a lawyer working for contingency. For example, you hit someone with your car and kill them. Insurance caps out at $100k. The family gets an attorney who will work for a 30% contingency fee, because the family cannot afford to hire an attorney at $500 an hour to handle the case.
The attorney listens to the facts from the victims. The attorney then researches your assets. He finds:
$150k in 401ks/IRAs
$100k in home equity
$2k in a checking account
The attorney declines to take the case because only $2k are seizable. You may very well have $50k in gold coins, that make up 25% of your PP (with the other 75% in your protected retirement accounts). And *if* you are sued, and *if* you lose, then you're required by law to disclose those $50k in gold coins.
But if the gold coins are invisible, then no lawyer will take the case against you and nothing will happen.
Thus, the PP is an interesting concept to me in that it expands your creditor protected accounts by ~25% then what you could otherwise have. You could of course go 100% gold coins and be a ninja, but the problem is you are exposed to gold fluctuation. The PP is a "safe" way that allows you to hold 25% in gold without fear of total portfolio losses.
Check out the other 2 links I posted in this thread - direct links to parts 2 and 3 of the series I started writing. I spent a while thinking and researching those, and there's good info in there.
For now, check out these direct links to parts 2 and 3 where I answer your question you just asked.
http://www.bbbfinance.com/?p=82
http://www.bbbfinance.com/?p=85
The short answer is that if you do not look like a viable target for a lawsuit, then you won't get sued by a lawyer working for contingency. For example, you hit someone with your car and kill them. Insurance caps out at $100k. The family gets an attorney who will work for a 30% contingency fee, because the family cannot afford to hire an attorney at $500 an hour to handle the case.
The attorney listens to the facts from the victims. The attorney then researches your assets. He finds:
$150k in 401ks/IRAs
$100k in home equity
$2k in a checking account
The attorney declines to take the case because only $2k are seizable. You may very well have $50k in gold coins, that make up 25% of your PP (with the other 75% in your protected retirement accounts). And *if* you are sued, and *if* you lose, then you're required by law to disclose those $50k in gold coins.
But if the gold coins are invisible, then no lawyer will take the case against you and nothing will happen.
Thus, the PP is an interesting concept to me in that it expands your creditor protected accounts by ~25% then what you could otherwise have. You could of course go 100% gold coins and be a ninja, but the problem is you are exposed to gold fluctuation. The PP is a "safe" way that allows you to hold 25% in gold without fear of total portfolio losses.
Check out the other 2 links I posted in this thread - direct links to parts 2 and 3 of the series I started writing. I spent a while thinking and researching those, and there's good info in there.
Re: Asset Protection
Good stuff TripleB.TripleB wrote:
Check out the other 2 links I posted in this thread - direct links to parts 2 and 3 of the series I started writing. I spent a while thinking and researching those, and there's good info in there.
I enjoy reading your blog. What is your background, if you don't mind my asking?
Last edited by AdamA on Sun Jan 22, 2012 9:30 pm, edited 1 time in total.
"All men's miseries derive from not being able to sit in a quiet room alone."
Pascal
Pascal
-
MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Asset Protection
That kind of privacy is not just limited to gold. The same can be done for titleable real property with anonymous LLC's (or trusts in places like CA). It won't stop a determined and thorough investigation, but the more you look "paper poor" the less you will be a lawsuit target.TripleB wrote: The short answer is that if you do not look like a viable target for a lawsuit, then you won't get sued by a lawyer working for contingency. For example, you hit someone with your car and kill them. Insurance caps out at $100k. The family gets an attorney who will work for a 30% contingency fee, because the family cannot afford to hire an attorney at $500 an hour to handle the case.
MG
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Asset Protection
Make yourself like a skunk and you will be safe from many predators.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Asset Protection
I prefer friendly liens to anonymous LLCs since the only state that I know of that has anonymous LLCs is New Mexico and if they change the law then you're screwed. And you're paying a NM attorney to serve as your registered agent every year plus the annual filing fees.MachineGhost wrote:
That kind of privacy is not just limited to gold. The same can be done for titleable real property with anonymous LLC's (or trusts in places like CA). It won't stop a determined and thorough investigation, but the more you look "paper poor" the less you will be a lawsuit target.
MG