Asset protection is the art of eliminating your liability and protecting your assets from potential lawsuits. I say potential because once you have a solid plan, nobody will bother suing you. Even if they think they can win. And before any internet ethicists jump down my throat, understand that this is all done legally.
Also, I realize you may already have an LLC. If you think that’s all you need to protect yourself, check out our previous piece on why an LLC alone isn’t an asset protection plan. Anyway, let’s get down to business. Asset protection involves two main things.
Anonymous Structures and Separation of Assets
When it comes to the asset protection basics, anonymity is a cornerstone. We make you anonymous by separating your assets from your operations. This way if your operations become liable, your assets will still be safe.
So how do we separate your assets? By putting them all in one shell company. This particular company doesn’t interact with anybody. It doesn’t do anything and it has zero contact with the outside world. It’s held using anonymous names inside of Anonymous Trusts and anonymous structures. Multiple layers of anonymity protects you and your property from litigation.
Nobody except you will know who owns these structures. Which means nobody will be able to come after those assets in a lawsuit. But of course, we can’t talk about the asset protection basics without mentioning the shell company.
Operating Company As a Shell Company
The shell company owns no assets but it conducts all of the business. It’s your face to the world. It’s the face (company) we want people to sue if there’s ever a legal dispute. Yes, you read that correctly. We actually want this to be the target. Think of it as a legal decoy.
In fact, we want to structure our contracts to say that “if we have a problem you can only sue this company.” The company we’d list would be your shell company. It sounds simple, but doing it will eliminate virtually all of your liability.
When it comes time to set up your asset protection plan, always think: assets on one hand; complete anonymity, separation and operations on the other.
Asset Protection Kills Lawsuits Before They Happen
A formidable asset protection plan will always include anonymity and a shell company. Most of the time, this will be an LLC or a Series LLC. I hope you enjoyed my short blog post and video about the asset protection basics!
Are you interested in learning more about how these plans can protect you from lawsuits? Contact us today to take your first steps towards becoming litigation-proof.