Why Ordinary People Set Up Offshore Bank Accounts - Offshore Banking And Asset Protection

We often get questions about offshore bank accounts here at Royal Legal Solutions. Offshore bank accounts are one avenue for real estate investors to protect their assets.

We thought it was time to give you a straightforward guide to how these accounts work. Also, what you need to do to open one, and how to manage an offshore bank account like a pro.

Aren't Offshore Bank Accounts for Criminals?

Of course not. You might see criminals talk about their offshore bank accounts bursting with hidden millions. That's for primetime television. It's storytelling stuff, and the truth is less glamorous and much saner. Almost anyone can open an offshore account. Furthermore, almost anyone can enjoy asset protection benefits, privacy, and other perks.

An ordinary real estate investor may use an offshore bank account for a few reasons. Some primary uses include:

holding cash assets
taking advantage of foreign banking privacy laws
protecting income from legal attacks

You can prevent lawsuits altogether if used with other asset protection tools. But that's making a dent in the surface of the power of these accounts.

These accounts are not "for criminals." But, it would be dishonest to imply criminals don't use offshore accounts to hide their money.

So, have certain types of criminals exploited offshore bank accounts? Sure. But most countries don't like hosting criminals, even in their banking systems. Many have enacted legislation to discourage crimes by using an offshore account. Such crimes include money laundering or establishing offshore accounts.

Pay attention to how any country you're considering banking responds to these threats. A strict rule of law is desirable in your banking host country. It provides stability.

Benefits of Using Off-Shore Bank Accounts: The Appeal for the Ordinary Investor

You can expect a lot of variation between countries. Each gets to make its banking laws, and how financial privacy is one thing to consider. Yet even amongst this variation, there are some common threads. It's vital to be clear that your situation will determine which benefits you use.

Here are a few top reasons ordinary people take advantage of offshore banking. It might surprise you how downright innocent or dull they are.

Stability and Control: Break Free of Banking As Usual

Destabilization of currencies isn't the stuff of dystopian fiction. It can and does happen worldwide, more often than you think. You may feel you have to be ultra-wealthy to worry about global banking stability. That's far from true. This problem impacts a considerable percentage of people.

Most Americans don't worry about the U.S. Dollar. Look at what happens in countries like Zimbabwe that experience genuine financial crises. It got so bad that the government lopped zeros off their bills to combat hyperinflation. The country set a world record by printing trillion-dollar bills. That trillion-dollar note may seem like a fun novelty to buy on eBay. But, it was serious business for everyone who relied on that currency to live.

Americans suffer from thinking instability happens to "other" places like Zimbabwe. But if you look at actual statistics, you might find our system isn't as secure as you think. Our banks over-leveraged themselves. That caused a crisis many times in recent history. Even if you assume financial crises are flukes, we can still look at worldwide economic data.

For instance, the World Economic Forum measured the soundness of banks in countries worldwide. Their Global Competitiveness Report measured the perceived safeness of a country’s banks. Then, they ranked the world's nations in order of perceived safety. The results may surprise you!

Where do you think the U.S. ranked? At the top?

The American banking system is the 18th safest in the world. 17 countries outranked the USA. They're the ones you want to look at if stability is a significant motivation for your accounts.

Offshore banking can mitigate instability. Even if the world outside is in chaos, you can rest easy if your money's sheltered offshore. You can use an offshore bank account to protect your money from conflict and uncertainty.

Currency Options and Diversification

With offshore accounts, the U.S. Dollar doesn't confine you. You will select which currency or a mix of money you'd like to default to for your bank account. The ability to diversify appeals to many real estate investors. There may be economic advantages to exploring possible alternatives to your primary currency. Insufficient research could cost you. When in doubt, call a pro.

Asset Protection Benefits of Offshore Banking

Litigants file 15 million new lawsuits yearly in the U.S. That's one lawsuit for every dozen adults. Real estate lawsuits, in particular, are always a genuine threat. The threat grows as you become more successful. In our litigious society, protecting your money is ideal.

You can protect your assets with domestic tools. Offshore bank accounts offer you the luxury of moving everything of yours into security. You're moving the assets into a different jurisdiction rather than an entity structure. The principle remains the same.

Because you choose where to place your funds, you stay in control without being at risk. Generally, it is more difficult to "go after" foreign-held assets than domestic ones. Also, you may receive extra asset protection from your host country. You get to choose which legal rulebook you will play by. That's a tremendous advantage for anyone building wealth with their business.

Taking Anonymity Even Deeper: Banking Privacy

Your privacy is one reason to consider offshore banking. Switzerland is famous for their protections. If privacy is a significant motive for you, ask yourself: from whom? Because it is possible to have privacy from people and governments alike. It will likely help you plan to know if your primary concern is, say, creditors over the Taxman or vice versa. You can evade interaction with either through the intelligent use of offshore bank accounts.

Greater Selection, Financial Perks

Interest rates with foreign bank accounts are often higher compared to American banks. Instead of shopping from a few select banks, you now have the entire world of finance from which to pick and choose. If you want a high-interest savings account, you can have that.

An attorney and financial advisor may be able to offer more insight into your situation. The benefits of offshore banking aren't even specific to real estate investors. Anyone in the West may want to consider the higher interest rates to find better deals overseas.

Off-Shore Banking Can Be For Everyone

No true one-size-fits-all asset protection plan involves only offshore banking. Reaping its benefits is easy and not time-consuming. There's a final one that is huge but more difficult to quantify. There are emotional benefits. Knowing you have an emergency plan that can withstand a financial disaster. It's tough to hang a price tag on genuine security.

Are you ready to speak with an expert? Learn about our comprehensive solutions you can use to achieve financial freedom. Reclaim your time, protect your assets, and build your legacy. Book a FREE discovery call now.

Navigating Historically High Inflation Combined with Low Interest Rates

Let's discuss what's happening with the cost of goods and how you can navigate historically high inflation with low-interest rates.

We recently held a Royal Investing Group Mentorship with Ron Galloway, an expert financial researcher with 35 years of experience to answer the inflation question. Galloway has been featured in The New York Times, CNN, CNBC, and The Wall Street Journal.

Please keep reading to learn more about inflation, how it's measured, and the potential impact on low rates in your real estate investments.

What Is Inflation?

According to expert financial researcher Ron Galloway, inflation is "simply an increase in the money supply." In the past year, nations increased their money supply up to four times, says Galloway, which led to historically high inflation.

The rate currently reduces your money's value and drives up prices.

When you shop, do you notice that things cost a little more each time you go back?

For example, last year your shopping cart cost $300. An identical shopping cart might cost you $320 or more this year. At its most basic, that's inflation.

Contributing Factors

Galloway explains that the economy is not as strong as it is reported because of:

a high unemployment rate
supply chain issues caused by high unemployment
increase of deposits into checking accounts
the significant growth of $1, $20, and $100 bills in circulation
historical lows in the movement of money (people are hoarding it)

Each of these factors contributes to the inflation situation we are experiencing.

How Is Inflation Measured?

We measure inflation by measuring the cost of many items over a specified period. The Bureau of Economic Analysis and the Bureau of Labor Statistics measures goods and services costs, categorizes the expenses, and creates different price indexes.

Price Indexes

Price indexes are lists of prices. There are different price indexes; one measures households and their consumption of personal goods and services. Another price index measures commercial companies and their raw materials consumption and needs for machinery.

Measuring Inflation

To measure inflation, we look at the level of a price index. If the price index level is higher than over a year ago, we know that prices are higher on average, and there is inflation.

Galloway argues that inflation numbers provided by government statistics agencies do not adequately account for essential goods like food and fuel. Necessary commodities like food and energy cannot negate an increase in prices and other goods that aren't essential, like electronics.

That means that real inflation for essential goods may be even higher than the reported rate of 7.5%.

What Is the Impact of Low-Interest Rates on Banks?

The impact of low-interest rates is that banks are less willing to loan money. Banks have increasingly heightened their standards and investigated and thoroughly vetted potential borrowers. All in all, interest rates are low, but there hasn't been a corresponding increase in loans.

Galloway explains that real interest rates are "the rate of interest minus inflation." Accordingly, the combination of low-interest rates and rising inflation disincentivizes banks from loaning money.

As a result of that unprofitable combination, top institutions would instead use their cash for trading derivatives between each other. Galloway notes if one of those significant banks defaults on their derivative, we'd have a repeat of the 2008 recession.

Expand your portfolio, diversify your assets, and hedge against inflation. To do that, you might consider investing in Carbon Credits.

What Is the Impact on People Who Hold Assets?

Inflation eats up your cash, but people in debt and assets benefit from it. If you hold assets, like real estate, during an inflationary period, those assets increase in value.

Now might be a good time for you to invest in real estate.

Indeed, prices are up, but so is demand. So far, there are no obvious indicators that the housing market will slow down. In addition, as Galloway mentioned, real estate, a tangible asset that appreciates, is a good investment during inflationary periods.

If you are ready to take the next step to secure your financial freedom, check out:

Key Takeaways

Never in history have we had interest rates this low and inflation rate so high. As a result, you need to protect yourself and your assets. Here are the key takeaways from today's discussion:

inflation is an increase in money supply
price indexes measure inflation
the actual rate might be closer to 20%, not the reported 7.5%
low-interest rates and high inflation makes banks less likely to loan money

During this period, it is an excellent time to be a real estate asset owner. If you want to learn more about market trends or other real estate investment topics, register for FREE Royal Investing Group Mentoring Wednesdays at 12:30 pm EST.

How to Maintain Operational Anonymity

How do I maintain operational anonymity after a structure is in place?

Maintaining operational anonymity isn’t easy, which is why most real estate investors worry about being the target of a lawsuit, regardless of the protection in place.

Does this sound like you? You’ve made it to the right place. In this article, we’ll explain:

why anonymity is important
how to obtain and maintain anonymity
who you should disclose your identity to and how
what you should do if someone compromises your anonymity

We invite you to read on and learn how to maintain anonymity operationally.

Why Is Operational Anonymity Important?

Anonymity is essential because it stops lawsuits before they start, as belligerent parties will be unable to find the actual target of the suit.

How Do We Obtain Anonymity?

We obtain anonymity by using a variety of tools. These tools include using:

an agent trust as the member of your LLC
a land trust to hold title to a property
a separate LLC for operations (vs. operating from your asset holding LLC)

We hide assets using Anonymous Trusts, which allows you to keep ownership information hidden. The Anonymous Trusts keep you safe by owning your LLC and serving as the Title Holding Trust, the name disclosed when filing Articles of Incorporation.

In practice, it would look like this:

You
LLC
Series LLC
Anonymous trust listed as the owner of the property
Your real property

When someone goes to research the owner of the real property, the Count Clerk’s records will show the anonymous trust as the owner. Neither the trust owner nor you registered with the state, so your identity is safe.

How Do You Maintain Your Operational Anonymity?

There will be times when you need to maintain operational anonymity throughout running your business. As you continue on your real estate journey, you want to make sure that you protect your investment and your livelihood.

What follows are three common scenarios in which you will want to maintain your anonymity:

#1 How To Purchase A Home

What matters is how you plan to purchase the home. If you buy it:

with cash–purchase the house into a land trust using a nominee trustee
with a loan–purchase the property, take the loan in your name, then move to the land trust post-closing

#2 How To Enter Into A Contract With A Third Party

When you contract service providers, you will want to interact through an anonymous operating LLC. These providers include, but are not limited to:

contractors
property managers
utility providers

The operating LLC will be the party that contracts with the service provider, and you will sign as the manager of the LLC.

When you contract with a tenant, you will interact through an anonymous operating LLC or a third-party property manager. The operating LLC will be the party that works with the service provider, and you will sign as the manager of the LLC

#3 How To Sell Your Property

When you sell your property, anonymity is not a priority. To sell, you should move the title back to your name and sell. When you sell the property in your name, it simplifies the closing process. Finally–as the seller–you ensure the proceeds check comes directly to you.

What Parties Can You Disclose True Ownership To?

In some cases, you will want to disclose actual ownership. Some of the most common parties to tell include:

your bank
your lender
your title company
your insurance agent
court officials

How Should I Disclose True Ownership?

Sometimes you may not need to maintain complete operational anonymity and disclose true ownership. When considering whether you should tell your identity to each of the previous parties, ask yourself the following questions:

How will the information be used?
Will the data be publicly available or privately held?
Under what circumstances would you disclose this information to a third party?

What Happens If Your Anonymity Has Been Compromised?

Don’t panic if someone compromises your anonymity. You have options available to you to address the situation. The initialism “STACK” details the steps you should follow:

Stop the action until you gather more information
Talk to the party requesting the information to understand why the information is needed
Assess if you can provide information without disclosing ownership
Call your attorney if the information is necessary to see how to give it safely
Know who can distribute the information and where

Conclusion

Ideally, it’s clear how to maintain operational anonymity while managing your real estate investment.

Now that you know how to protect your privacy, here are some key takeaways about the protection provided by anonymity:

Anonymity is essential, but ultimately the liability protections are your foundation
LLCs and trusts can protect your privacy
Protect your anonymity by following the guidelines:
- who can receive information
- how to sign documents
- how to ensure records do not end up with third parties
If anonymity is compromised, you can take some steps to mitigate the exposure

Do you want to join other savvy investors and learn more about how to protect or grow your investments? Register for FREE Royal Investing Group Mentoring Wednesdays at 12:30 pm EST.

Wyoming Statutory Trust vs. Delaware Statutory Trust

Asset protection isn't easy, especially if you are a California-based real estate investor. The good news for you is that LLCs aren't your only option. A Wyoming Statutory Trust, for example.

Using LLCs is a last resort for the California investor when looking for comprehensive asset protection. The $800 per year franchise taxes probably make a non-starter for you as you seek to compartmentalize every asset you own.

Does this sound like you?

The truth is that you don't need LLCs for protection in California. Also, you can use trusts that function just like traditional LLCs and Series LLCs. That's important as a real estate investor because these trusts provide:

protection
anonymity of ownership
relief from the California franchise tax

To protect real estate investors like yourself, you might consider reliable and proven options, like the Wyoming Statutory Trust and the Delaware Statutory Trust.

Read on so you can evaluate the Wyoming vs. Delaware Statutory Trust, then decide which one is right for you.

Wyoming Statutory Trust: A Unique Tool for Savvy Investors

The Wyoming Statutory Trust and Missouri Statutory Trust function like LLCs, but they are trusts.

If you use the Wyoming Statutory trust for protection, you can:

create an individual trust for every single property that you own
they are individually asset protected just as if you held them in an LLC

Since you create these trusts with anonymity through the use of a nominee trustee, you can anonymously own both:

your trust
the underlying asset(s)

We recommend using an attorney to create the Wyoming Statutory Trust. Your attorney should also serve as the nominee trustee to ensure your anonymity. Your attorney protects you and your trust with attorney/client privilege as a trustee.

Valuable Evaluation of Pros and Cons

The Wyoming Trust may be the right trust for you if you have fewer properties or have no plans to grow.

The upsides to the Wyoming Statutory Trust include:

they are inexpensive
provide effective protection

Wyoming privacy laws do not require the registration of trust agreements. That means privacy about you, your family, assets, and your estate plan.

You should be aware of the limitations of the Wyoming Statutory Trust. The main issue with the Wyoming trust is the complexity it adds to scalability. It may turn out that this trust proves too complex and expensive to provide the proper protection for you.

The first is management. Management of each trust requires:

its bank account
set of accounting books
dedicated attention to each trust

You would have a multitude of entities that may each require their tax reporting and filing. The amount of reporting on the entities can be an operational nightmare as you grow.

The second limitation deals with scalability. As you scale, you will be financially responsible for:

costs of the creation of an additional trust
operational complexities of banking and accounting
tax preparation and filing costs

What follows is more information to help you decide on the merits of the Wyoming Statutory Trust vs. Delaware Statutory Trust.

Delaware Statutory Trust: Proven Asset Protection

The Delaware Statutory Trust functions like a Series LLC, but it is a trust. That means the Delaware Trust might be for you if you have multiple properties to protect and you have plans to grow your business.

The Delaware Trust allows you to:

create a single trust
produce an infinite number of free children for your trust
compartmentalize and own your company properties anonymously

An attorney is acting as nominee trustee and masks the actual ownership.

Promising Security from Delaware's Trust

The upside to the Delaware Statutory Trust includes:

infinite scalability for free,
streamlines your tax, bookkeeping, and banking into a single entity (the parent Delaware Statutory Trust)

The trust allows you to scale freely without additional operational complexity or tax filings.

Everything in your life should stay precisely the same as if you managed everything through a single entity that you wholly owned.

The primary downside is that the Delaware Statutory Trust cannot hold any active businesses such as typical commercial businesses, and you cannot "flip" your investments.

The limit on commercial businesses and the inability to "flip" properties may not fit your specific situation. Still, the Delaware Trust is a solid option in many investing cases.

We know the decision is an important one for you to make. Read our "Step-By-Step Statutory Trust Beginner's Guide" for more information.

The Bottom Line: Wyoming Statutory Trust vs. Delaware Statutory Trust

The Wyoming Statutory Trust is an excellent option if you have a single asset and don't plan on acquiring more.

If you are an investor with intentions to scale, then the additional upfront costs of a Delaware Statutory Trust will pay dividends in the long run.

You want to protect your assets and ensure your financial freedom. Let us help you! Register for FREE Royal Investing Group Mentoring on Wednesdays at 12:30 pm EST to learn more.

Asset Protection for Financial Freedom

Whether you are an experienced real estate investor or building a new real estate business, asset protection & financial freedom have to be on your mind. Scott Smith, Royal Legal’s founder, and lead attorney, recently sat down with real estate investor Whitney Sewell to discuss Asset Protection for Financial Freedom.

This informative discussion covered the importance of protecting your assets and why a real estate investor should not solely rely on insurance policies for protection against lawsuits.

#1 Insurance doesn’t provide asset protection from lawsuits

As a real estate investor, you have to know that you can’t hold assets in your name and rely on insurance to protect you. The amount of coverage insurance is insufficient, and you may find yourself on the wrong end of a lawsuit.

Scott provides a personal anecdote about a friend who got sued for breach of contract and lost. Because his friend relied only on insurance and held his assets in his name, he lost $3 million in real estate.

That’s not to say that you shouldn’t have insurance. It would be best to get insured, but you must realize that insurance does not completely protect your assets. Insurance covers you from things like negligence. However, it does not protect you from things like breach of contract, fraud, and gross negligence claims.

Breach of contract, fraud and gross negligence claims have the potential to derail your real estate investment business. To get 100% bullet-proof protection, you have to think and conduct business like a wealthy person.

#2 Think like a wealthy person

We live in a litigious society, and having assets may make you a target for lawsuits. To protect yourself, adopt the same strategies that wealthy people use. That means:

Don’t own anything in your name.
Create asset holding companies.
Secure your anonymity.

Think about it like this: Wealthy people don’t own things. Instead, they have companies that own stuff for them. When someone sues a wealthy person, there isn’t anything to get. The asset holding company protects wealth and ensures privacy from litigation. That’s why asset protection for financial freedom is such a critical step in wealth generation.

#3 What is the most cost-effective way to achieve asset protection for financial freedom?

The Series LLC is the most cost-effective way to protect your assets. With a Series LLC, you can isolate your investments from one another.

If the worst happens and you get hit with a lawsuit, the plaintiff cannot get to your other investments, nor can they get to your assets. The Series LLC helps you think and do business like a wealthy person because:

You don’t own anything. Your LLC owns your assets.
The trust holds your assets and companies.
The trust is anonymous.

These layers of a Series LLC work together for maximum protection of your assets and investments. Savvy investors use the anonymity of the LLC to prevent people from locking onto them as a target to sue, and it allows them to keep their investing strategy private from competitors.

#4 How does the Series LLC provide asset protection?

The Series LLC efficiently and affordably protects your assets from lawsuits by using a “parent-child” structure. The process goes like this:

Create “parent” LLC.
Create individual “child” Series LLCs with no additional filing.
Each “child” LLC minimizes your liability.

Each of the “child” LLCs protects assets and isolates them from the rest. If you did not have a Series LLC, you would have to pay to establish an individual LLC for each of your assets to create separation.

The best protection from lawsuits is anonymity. When people think that you have nothing of value, they have no motivation to sue you. A Series LLC shields your assets from the public and makes it an unprofitable decision to sue you.

If a plaintiff sues you, the Series LLC “parent-child” structure makes it so that only one of your assets is at risk.

Do you have a plan in place already? If not, let us show you how to achieve asset protection for financial freedom and build generational wealth through the use of a Series LLC.

Read this article to decide if it is the right way to get bullet-proof protection for your assets, Series LLC For Real Estate Investors.

Asset Protection for Financial Freedom Wrap-Up

And there you have it! An explanation about how to achieve asset protection for financial freedom.

We started by discussing the shortcomings of focusing solely on insurance for liability protection, noting that insurance provides some, but not all, of the asset protection you need.

We’ve also talked about the tips and tricks that wealthy people use to protect their wealth. Then, we went over what a Series LLC is and how it provides the most cost-effective way to protect your investments.

Ready to take your education to the next level? Get FREE Access to the Asset Protection Vault. This contains access to our top 5 video Masterclasses and ebooks for real estate investors.

The Rental Property Asset Protection Checklist

Keep potential lawsuits at bay by viewing the rental property asset protection checklist we have prepared for you. By doing so, you’ll be able to protect your assets without worry or distraction.

The following checklist recommends some protective measures you can take for your real estate investments, cash, other assets, and financial future:

Anonymous Land Trust
Setting up a Traditional LLC
Benefits of a Series LLC
Everyday situations to avoid ending up in court

The bottom line is that the best asset protection strategies stop lawsuits from happening. This list will help you decide how best to protect your assets.

Anonymous Land Trust for Rental Property Asset Protection

Anonymous Land Trusts are highly effective but lesser-known instruments that protect your privacy as a real estate investor.

One vital benefit that anonymous land trusts provide is that unknown ownership makes it harder to file a lawsuit against you.

Here are some frequently asked questions about a Land Trust:

What are the parts of a land trust?
They are vehicles to help savvy investors hold properties anonymously. An anonymous land trust has three components: a grantor, a trustee, and a beneficiary.

How does a land trust work?
When you decide to form a land trust with Royal Legal Solutions, we serve as your trustee and manage the trust. You are the beneficiary which means you (1) are not publicly identified and (2) can enjoy the profits from your property.

Read “Anonymous Land Trust for Real Estate Investors” and get more details to help you decide if this sound legal strategy is the right solution.

Setting Up a Traditional LLC

Limited Liability Companies (LLCs) legally separate you from your business.

Benefits of an LLC:

Guarantee of personal security
Simple to create, simple to manage
Relatively inexpensive

We want to provide accurate information so you can make a sound decision. To that end, here are the most common drawbacks to using a Limited Liability Company:

Puts “all your eggs in one basket”
Expensive tax preparation
Not replicable on its own

Read “Texas LLC for Real Estate Investors” for more information. Ultimately, LLCs are okay for one asset, but a Series LLC is better for multiple assets.

Benefits of Setting Up a Series LLC for Rental Property Asset Protection

Series LLCs, a “parent-child” structure that ensures protection for your assets. Here are the steps of the structure:

Set up a Series LLC (this is the parent)
Create individual LLCs (these are the “child”)

Benefits of a Series LLC:

“Child” LLCs have no additional filing
Further minimizes your liability
Ideal for investors with multiple properties or types of assets

You might be having questions about a Series LLC. Here are the most common questions we encounter about this legal structure.

How does the Series LLC protect my assets?
Each asset is isolated from others.

How can I minimize my losses in a critical case?
The Series LLC structures your business in such a way that only one asset is at risk in any given lawsuit.

Why would I need anonymity?
If people think you own nothing, they have no motivation to sue you. Thus, the anonymity of the Series LLC shields you from lawsuits.

Read “Series LLC for Real Estate investors” to get a detailed account of how a Series LLC might benefit you. Overall, Series LLCs primarily help real estate investors with multiple properties or types of assets.

Avoid These Common Situations to Stay Out of Court

When you sign a lease with a tenant, you begin a legally enforceable contract that covers the terms of their tenancy.

Your tenant pays rent, and you conduct repairs and maintenance in exchange. When your tenant feels like they have no options, they might seek to sue you.

You don’t want to end up in a lawsuit, so make sure to:

Keep the living environment habitable
Refund security deposits when the tenant has fulfilled their obligation
Keep the property safe and injury-free
Respect your tenants’ privacy
Follow eviction laws
Adhere to the Federal Fair Housing Act
Keep following state tenant laws
Avoid credit abuse

Use this checklist as a guide to help you decide what type of asset protection is right for you. No matter what level of real estate investor you are, you need to protect your assets. Make sure to apply the lessons from this checklist today.

Bottom Line: Protect Your Assets

As you continue along your real estate investing journey, ensure that you protect your assets with the right financial strategies and business structures in place. Learn how to get bullet-proof asset protection with our FREE, 5-part educational series for savvy real estate investors.

Request your access to the Royal Academy Asset Protection Vault today!

Starting Your Real Estate Investing Journey

Are you currently considering starting a real estate investing journey?

Real estate investing makes people wealthy. Of the 400 richest Americans, 24 made their money on real estate investments. At one time, they were like you--starting as a novice real estate investing professional. Below we have compiled some of the opportunities and challenges you may encounter so that you can hit the ground running.

Here are the things that you should know as a beginner on your real estate investing journey.

The First Step Is Forming A Series LLC

Real estate investing is not without risk. As a result, before you take this monumental step towards securing your financial freedom, you need to have rock-solid legal and financial structures in place. One way to ensure that you have the proper legal and economic systems is to create a Series LLC.

Take a moment to discover how Royal Legal Solutions can protect you with a Series LLC. This business structure will safeguard your investment and livelihood.

Real Estate Investing Journey Fundamentals

You must be financially prepared to start investing in real estate. Read on for six tips to start on a solid foundation.

1. Reduce Your Debt for Maximum Advantage

As a new real estate investor, carrying debt is not ideal. Adding to your current expenses such as student loans, medical bills, or paying for essentials may put you in a challenging position. Ideally, you will want to have some money in savings to use as a safety net.

2. How to Use a Simple Method For Increased Profit

Depending on your investing goals, you will have to decide whether it would be better to purchase with cash or finance your real estate investment.

One benefit of a cash purchase is that you start accruing positive monthly cash flow. On the other hand, financing may generate a higher return on your investment.

For instance, you use cash to buy a property for $100,000. After collecting rent, deducting taxes, and other operating costs, you might see about a 10% return on your investment. A 10% return equates to a cash flow of $10,000 per year.

Another option is to finance the property with a 20% ($20,000) down payment and an annual 3.5% mortgage rate. After paying taxes, operating costs, and additional interest, your earnings will be about $6500 per year.

The cash flow is lower with financing, but the return on investment is much higher at 32.5%

3. The Bottom Line on Mortgages

Primary residence mortgages and rental property mortgages are similar. However, there are some critical differences.

First, people default much more often on rental property loans. That makes sense because a borrower who runs into financial trouble is more likely to focus on their primary home mortgage first.

In general, the additional risk associated with rental property loans results in lenders charging higher interest rates.

Second, rental property mortgages come with more stringent underwriting standards. The lenders closely inspect your credit score, down payment, debt-to-income ratio, and cash on hand.

4. Beware High-Interest Rates

In 2021, the interest rate is relatively low for a conventional mortgage. You should know that the interest rate on investment properties is higher than a traditional loan.

When you decide to become a professional real estate investor, you need to secure a low monthly mortgage payment so that your monthly payment does not disproportionately eat into your profits.

5. Seek Real Opportunities to Generate Wealth

You should set a goal of a 10% return on your investment. When developing your expectations, you need to consider the following factors:

Regular maintenance and repairs will cost about 1% of the property value annually.
Property taxes are, on average, 1.1% of the home value.
If you must pay HOA fees, they can range anywhere between $100 and $1,000 per month, depending on geography.
Unexpected costs like roof damage or significant plumbing issues require you to set aside around 25% of rental income for timely repairs.

An easy way to estimate your monthly operating expenses is to follow the 50% rule. Simply put, you need to figure that about 50% of your operating income will go to operating expenses.

For instance, if you charge $1500 rent, you should expect to pay $750 in total expenses.

6. Landlord Insurance: Important and Useful Security

It would be best if you protected yourself with landlord insurance. Landlord insurance covers property damage, lost rental income, and liability protection from a tenant or visitor injury on your property.

Profitable Tips to Give You the Edge

Surging Locations Are Key To Success

You will want to avoid making a real estate investment in a dying area that may become a burden to you.

Instead, find a city or location where the population is growing or where a community revitalization plan is in place. A revitalization plan in a community increases the likelihood of employment, living wage jobs, and tenants.

Here are some things to look out for in profitable rental properties:

Low property tax
Good school district
Growing job market
Local restaurants
Public transportation
Shopping

Each of these factors will likely contribute to a healthy set of potential renters.

Be Shrewd With Rental Properties

Remember, the more expensive the home means higher operating expenses. An excellent place to start your real estate investing is finding a $150,000 to $200,000 home in a growing neighborhood.

You want to follow the Goldilocks Rule, "You are looking for something just right." Don't buy the best house in the neighborhood for sale, nor should you invest in the worst.

Beginners Should Avoid Distressed Properties

Part of finding a home that is just right is avoiding a fixer-upper. You might think you are getting a bargain and can flip a distressed property into a cash cow. If you are only beginning your real estate investing journey, that's a monumentally bad idea.

The price of building materials and a labor shortage make the house flipping industry an expensive and dangerous endeavor--ask Zillow.

The Hidden Benefits of Property Managers

Should you hire a manager or go at it alone?

Using a property manager is a significant consideration for you as an investor. As a landlord, you would be involved with vetting tenants, coordinating maintenance, collecting rents, and resolving disputes. You may prefer to offload those duties to someone else so you can focus on activities that grow your business.

Hiring a property manager can be a tough decision because it will cost a portion of your operating income. The cost can be a considerable chunk of your profits, typically between 8% and 12%.

That said, an experienced property manager might still be worth it to you. Realistically, a property manager eases the burden of being a landlord and brings lots of experience and expertise to the table.

Most property managers:

Collect rent
Contract maintenance and repairs
Handle complaints, late rents, and evictions
Market your property
Pay property tax, utilities, and insurance on your behalf
Price the rent
Show tenants your property
Screen potential tenants

Consider the following to determine if a property manager is worth the cost:

Am I willing to deal with tenants?
Do I have time to manage this property?
Do I have to have complete control?
How far away is this rental property from me?

Pros v. Cons of Starting a Real Estate Investing Journey

As with any financial decision, you must decide if the benefits outweigh the costs. Real estate investing is a great way to increase your wealth, but it is not without risk.

See the table below to help you decide whether starting a real estate investing journey is right for you.

Real Estate Investing Journey Recap

First, one way to mitigate some of the risks you will encounter in real estate investing involves forming an LLC. Read more to learn about the benefits of using a Series LLC to protect your assets.

Second, make sure your finances are in order before you embark on your real estate investing journey. You can reduce your debt which will help lower your debt-to-income ratio and improve your credit score. A higher credit score means better rates and terms and more cash in your pocket.

Third, find affordable housing in growing areas. Remember, the key is to get affordable housing without buying a money pit that needs a lot of work.

Fourth, consider hiring a property manager--the hassle and time saved might be worth it to you!

Before you decide to begin real estate investing, ensure that you have the appropriate asset protection and business structures in place. To discover how you can achieve bulletproof asset protection, check out our FREE, 5-part educational series for real estate investors. Request your access to the Royal Academy Asset Protection Vault today!

Offshore Holdings Ethics Debate Sparked Following Leak of Pandora Papers

Beginning on October 3rd, 2021, a document dump dubbed the Pandora Papers was released involving nearly 12 million pieces of evidence by the International Consortium of Investigative Journalists (ICIJ). More than 600 journalists from 150 news outlets contributed to the investigation. Information contained therein exposed a global network of powerful financial interests and raised questions about the legitimacy of shell companies, offshore holdings, and anonymous ownership.

While this wasn't exactly a bombshell revelation, it verified what many people had already come to realize. Yet, the Pandora Papers scandal has revealed something more significant than the known corruption happening in our world. It has brought to light the toxic attitude towards the general public held by those in the highest positions of power and influence. The publicity that the story has garnered has many investors wondering how they may be impacted by what could very likely be the criminal dealings of others.

As summarized by the ICIJ, "The Pandora Papers reveal the inner workings of a shadow economy that benefits the wealthy and well-connected at the expense of everyone else."

Highlights of Findings in the Pandora Papers

Records reveal covert dealings that implicate:

35 current and former world leaders
more than 330 politicians and public officials in 91 countries and territories
over 130 billionaires in various countries, including the United States
The offshore holdings system continues to thrive despite decades of legislation, investigations, and international agreements designed to combat money laundering and tax dodging.
The Pandora Papers unmask the hidden owners of offshore companies, secret bank accounts, assets, and artworks by Picasso, Banksy, and other masters.

Read the full exposé here.

Offshore Holdings and Their Potential Negative Outcomes

Loopholes in law enable people to legally avoid a portion of their taxes by moving their money, assets, or businesses to tax havens. Using a tax haven brings into question several ethical concerns.

Issues regarding equity
Local economic impact
Used to shield criminal activity
- Tax evasion
- Fraud
- Avoidance of international sanctions

While it is not illegal to hold assets offshore and anonymously, the risk of abuse is an indication that oversight and regulation are necessary. There have been repeated calls for governments to make it harder to avoid tax or hide assets, particularly following previous leaks such as the Panama Papers from years ago.

It's no surprise that existing legislation has had little impact considering that those prominently taking advantage of offshore holdings are often the very people responsible for oversight.

Whose Names Did the Pandora Papers Reveal?

Among the extensive list of those implicated in the Pandora Papers includes the following political leaders and notable influencers:

Queen Elizabeth II, Queen of England
Volodymyr Zelensky, President of Ukraine
Luis Abinader, President of the Dominican Republic
Laurent Lamothe, former Prime Minister of Haiti
Tony Blair, former Prime Minister of the United Kingdom
Sachin Tendulkar, Indian cricketer
Shakira, Colombian singer

View the complete list here.

Legitimate Reasons for Creating Offshore Holdings

It would be foolish to think that anyone who has offshore holdings is involved in nefarious activities. There are several legitimate reasons why a person may want to hold money and assets in different countries.

Scenario #1: Asset Protection Benefits

While you can accomplish asset protection goals with domestic tools, offshore banking offers you the luxury of simply moving your cash from a position of vulnerability and to one of security. In this case, you would be moving money overseas into a different jurisdiction rather than into an entity structure.

Scenario #2: Guarding Against Unstable Governments

Here you would be dealing with a sovereign nation with its laws, each with advantages and drawbacks. Those nations with reputations for being tax havens have implemented legislation to prevent blatant abuse of their banking systems. Such laws are generally designed as a prevention to money laundering and should not pose problems for investors.

The above scenarios illustrate valid reasons for having offshore holdings and should not be considered an exhaustive list.

What Impact Will the Pandora Papers Have on the Future?

It remains uncertain what significant impact the Pandora Papers will have on those involved. History has shown that political fallout is minimal, if existing at all, and slow to occur. For example, the similar Panama Papers from 2016 only resulted in the conviction of a single US taxpayer so far.

Some news outlets speculate that the US will take a long hard look at its offshore banking regulations to ensure transparency. In turn, new reporting requirements are likely to be imposed on attorneys, financial advisors, and CPAs.

Pandora Papers aside, we can be sure that changes in reporting are on the horizon. Sweeping tax reforms proposed by the Biden Administration would require all financial institutions to monitor deposits and withdrawals in accounts that have balances above $600 at any given time.

Whether the new tax proposal is adopted or not, we can deduce that tax reforms are a high priority for the current administration. That is why it is more critical than ever to ensure that your assets are protected and that your business structures are legally compliant.

How Are the Structures Used by Royal Legal Solutions Different?

Royal Legal Solutions allows investors to use offshore investing and tax havens to minimize liabilities in such a way that:

appropriate authorities still have access to the information
rejects participation in any criminal activities
operates within the US-sanctioned loopholes

We encourage readers to take a closer look at other articles we have posted on this topic, such as:

Our current clients benefit from regular consultations with our legal and tax teams. For anyone else with questions or concerns about your holdings, we invite you to reach out.

Using Your C Corporation’s Tax Brackets To Reduce Your Tax Burden

Every real estate investor or business owner knows that taxes take up a big chunk of profit and earnings from investment income and capital gains. Understanding how the tax system and tax brackets work may help you reduce your tax burden and liabilities.

As a real estate investor, you may be able to minimize income taxes either by hiring family members or your C corporation. This article focuses on the possible tax benefits of outsourcing business contracts to a C corporation owned by you.

Interested in learning more? Check out our article, Using Your Family’s Tax Brackets To Reduce Your Tax Burden.

How the progressive tax brackets work

Progressive tax brackets start taxing the lowest amount of income at the lowest rate. The tax rate increases as income rises. Simply put, this means that you would fall in a higher tax rate bracket if you are a high earner; likewise, low-income earners pay at a lower rate.

Here’s a (hypothetical) example of how progressive tax brackets can work:

Less than $15,000: 7.5%
Between $15,000 and $40,000: 15%
Between $40,000 and $150,000: 20%
Over $150,000: 30%

An annual income of $100,000 puts you in the 20% tax bracket. Note: The tax rates would be applied progressively—the first $15,000 will be taxed at 7.5%, the next $40,000 will be taxed at 15%, and the remaining $45,000 at 20%.

Using Your C Corp’s Tax Brackets

Similar to individual income taxes, C corporations have tax brackets. This is how it generally works:

The first step is to set up two businesses. One would be set up either as a sole proprietorship, a partnership or an S corporation. This business would be your main real estate business, operating as a pass-through entity. The income you get from this business is taxed at your individual tax bracket. The second business you set up will be taxed as a C corporation.
The next step is to hire your C corporation for tasks that can be justifiable and with payments that are reasonably within market rates. This can include things like property management, cleaning and maintenance or even digital marketing services.
When you pay your C corporation for fulfilled and completed contracts, this counts as eligible expenses that can be deducted from your pass-through entity income. The goal is to transfer this income from your higher income tax bracket to a lower business tax rate. So if your individual tax bracket is at 40%, you can potentially transfer income from your pass-through entity real estate business to your C corporation, which can be taxed at a lower rate of say, 25% (for example).

Things to consider when using a C corporation to minimize taxes

When you hire your C corporation, it is important to keep records such as contracts, agreements and invoices. The paper trail will help you in the event of an audit.
You need to ensure that the services or products provided by your C corporation are essential for your business and are related to typical business operations.
When your business outsources a contract to your C corporation, the payments have to be justifiable with going industry rates. If you are not sure about what is considered reasonable, you can do a quick research on the internet or put out a request for proposal in order to gauge bid prices.
While your business deducts the payments to your Corporation as an eligible expense, the Corporation would record this income when filing a tax return.

Ordinarily, all of these money movements can be complicated, therefore it is important to keep constant records of all expenses, payments and transfer of income. All contracts and agreements should be documented appropriately. You may need an accountant to ensure this is done properly.

How to manage income from your C corporation

You are probably wondering how effective it would be to use a C corporation to manage and reduce your taxes and how to go about receiving your income from this business. Well, this is a valid concern and there are various ways to go about it, some more tax efficient than others.

Through dividends: While you can pay yourself a dividend as an owner of the C corporation, this may not be the most tax efficient option especially as you set up the company to minimize taxes in the first place. This is so because dividends are an after-tax payment, meaning, they do not reduce the C corporation's taxes. Also, these dividends would be taxed in your hands when received resulting in double taxation.
Employee payments: If you work in the capacity of an employee and are actively involved in the day-to-day operations of your C corporation, you can receive employee salary payments. However, you want to make sure that payments received are based on market standards but also minimal enough to qualify for eligible tax benefits. You would need to fill out Form W-2 form for tax returns as an employee of the C corporation.
Other options include receiving tax exempt employee benefits or loaning out money from the C corporation to your sole proprietorship, partnership or S Corporation.

In conclusion

If you're looking for ways to reduce taxes on your real estate business, you can explore the C corporation option. While this may require effort to execute, it could lead to potential savings for your business.

To learn more about this powerful tax savings strategy and others that you can use to keep more of your earnings, book a tax consultation by taking our tax quiz. The information you provide will enable us to have a productive discussion the first time that we speak.

Dog Bites and Landlord Liability: Know Where You Stand

Making money as a landlord is hard.

As a real estate investor, you have to deal with zoning, regulations, bookkeeping, advertising, online marketing, showings, no-shows, bounced checks, late payments, and the fun of fixing a broken toilet on Christmas eve.

Keeping the money is even harder.

You are constantly spending money on maintenance and repairs, expenses, insurance, mortgage payments, marketing, and more.

But as a real estate investor, you have probably taken all these costs into your investment strategy. There is one risk too many landlords overlook, however: dog bite liability.

Unfortunately, if you are renting to tenants with dogs, you have a furry minefield of liabilities threatening your growing real estate investments. One dog bite lawsuit can wipe out all your hard-earned rental profits in the blink of an eye.

No matter how much you love dogs or how well you treat your tenants, a dog bite lawsuit against your tenant will almost certainly include you as the landlord. Pet ownership laws tell you your legal responsibility for your pets. These laws are complex and different in every state.

As usual, we'll start with some education ...

Landlord Liability in Tenant Dog Bite Cases

Fortunately, in most cases, you (as the landlord) may not be DIRECTLY liable if your tenant’s dog bites someone. Just because you leased property to tenants with dogs is usually not enough to make you legally responsible for damages. But again, the landlord’s liability is different in each state and hard to predict.

As a real estate investor, you should know the three critical scenarios that affect your liability.

#1 Landlord Knows - But Does Nothing

If a landlord has actual knowledge that his tenant is keeping a dangerous dog on the premises, some states will find him liable if he does not remove the dog to ensure the safety of others. The tricky part is that it is not the knowledge that makes the landlord liable. It is the fact that he knew and did nothing about it.

Suppose the landlord has control over the property and knowingly allows a dangerous and vicious animal to be kept on the property. In that case, many states will find him at least partially liable for any damages.

#2 Landlord Knows - But Can’t Remove the Dog

But, let’s say the landlord knows the dog is vicious but cannot remove the animal. Seems impossible, but it is not. If you bought an apartment building with existing tenants, you might not have the authority or power to remove the tenant or the animal according to the existing lease.

If you try to legally remove the dog but are denied by the court, you might not be held liable in some states for future dog bite attacks. But don’t count on it. Even if you could not remove the dog, you still have a duty to protect the other tenants and visitors to your property. Imagine what the judge will think if you do nothing. Now, imagine what the judge will believe if you warn all the tenants, put up warning signs, erect fences, establish safe areas and walkways, and closely monitor the situation.

If you can remove the dog, then do so. If you can’t, you better have a suitable safety protocol in place.

#3 Landlord Harbors the Vicious Dog

This one is simple. If the vicious dog belongs to the landlord, or the landlord takes care of the dog for someone else - the landlord will most likely be liable in every state.

Dog Bite Lawsuit Payout Numbers

There are about 85 million dogs in the US and millions of dog bites each year, according to the American Veterinary Medical Association. Unfortunately, most of them are children.

The number of dog bite claims in 2020 was 16,991 and dog owners paid out $854 million in damages, according to the Insurance Information Institute.

The top five state with the most dog bite claims are

California 2,103
Florida 1,235
Texas 969
New York 881
Pennsylvania 787

The average payout claim in the U.S. was $50,245, with New York at the highest with an average of $66,917. California averages almost six dog bite claims per day.

As a real estate investor and landlord, you should be aware that there might also be punitive damages in some cases should you be found liable under certain circumstances.

How Landlords Can Protect Themselves

Be Proactive

Build your dog-bite case defense today. Remove dangerous dogs from your properties if you can. If you can’t, then do the following:

Warn and notify all tenants
Put up clearly visible and conspicuous signs
Put in necessary fencing and safety areas
Give written notice to all tenants that they are responsible for their animals
Thoroughly screen all future tenants to avoid these issues.

Structure Your Business for Protection From dog bite liability

The American legal system can be stacked against you. A single lawsuit can wipe out your real estate portfolio if you are investing as a sole proprietor. That's why you need to protect your real estate business from dog bite liability. Man's best friend can be a landlord's worst enemy.

Whether you use trusts, LLCs, or other entities, you can establish asset protection and privacy—and usually gain tax advantages as well.

Most lawyers give cookie-cutter advice and use boilerplate forms and agreements. Remember, you are building your real estate portfolio for future income and asset security. Find asset protection experts who understand the risks you face.

Self-Directed IRA Bitcoin Investing

Bitcoin is constantly making headlines. We're getting a little sick of hearing about it, to be totally honest.

As Bitcoin becomes mainstream, we hear stories of the crypto-savvy investor buying Bitcoin in its early years and becoming a millionaire. Which leaves more investors asking, “Why not me?”

In 2021, IRA investors are increasingly diversifying with Bitcoin and other cryptocurrencies. Self-Directed Bitcoin IRA investing can deliver high yields along with the tax benefits of non-digital investment.

Here’s a brief primer on Bitcoin and three steps investors can take to start making their own Bitcoin investments using a Self-Directed IRA-owned Business Trust.

Bitcoin Basics

With cryptocurrencies, encryption is used to make new currency units and perform transactions. All this is done in a decentralized system and records are kept in a blockchain, which is a type of digital ledger.

Bitcoin, released in 2009 by Satoshi Nakamoto, is one of thousands of cryptocurrencies but is easily the most popular. Bitcoin must be stored using an online digital wallet or in a personal computer. Due to hacking concerns, some owners use a hardware wallet (a USB-like device protected with a PIN code).

Bitcoin Gets Attention From Investors

Bitcoin turned heads in the investment world by going from a price of under $1 in 2011 to $40,111 on January 14, 2021. The highs and lows have attracted headlines, as in December of 2017, when prices doubled in a matter of weeks. As I write this, its current U.S. value is $33,626.60.

Bitcoin’s wider adoption and impressive gains led to the “Bitcoin IRA," bringing the flashy new investment into the stodgy world of traditional retirement accounts.

Bitcoin Meets the IRA

A traditional IRA (individual retirement account) doesn't permit alternative investments such as Bitcoin and other cryptocurrencies. They're not really known for trying new things.

But what about the Self-Directed IRA (SDIRA), with its more flexible structure? The IRS doesn’t list Bitcoin as a forbidden investment (only list life insurance and collectibles are specified as non-permissible IRA investments). Check out our article, Our 3 Most Popular Self-Directed IRA Investments, to see what else is (and is not) permitted.

How to Invest in Bitcoin Using a Self-Directed IRA

#1 Do Your Research

The information I’ve provided about Bitcoin is a good primer, but is by no means a substitute for doing your own due diligence. Be prepared for the uncertainty that surrounds Bitcoin as a new investment.

Also, since Bitcoin isn’t under a regulated system don’t expect the same type of publicly available financials you’d find with traditional stocks or mutual funds.

You can educate yourself on how the IRS deals with Bitcoin investments; a good cryptocurrency resource is Investopedia.

#2 Choose the Right IRA Custodian

The "custodian" is the financial services company that manages your retirement account for you. To learn more, check out our article, Why Your Self-Directed IRA Needs A Special Custodian.

Traditional IRA custodians won't even think about it, but if you're in the market for the self-directed version, you'll need to make sure your IRA custodian is IRS-approved and allows Bitcoin investments. Still, you probably won’t enjoy true checkbook control over your account.

Your SDIRA is self-directed (as the name says), but it isn’t “self-managed.” This means you can’t write a check out yourself for a Bitcoin transaction without a custodian approving the transaction. The processing time can hurt you when you're trying to buy or sell quickly. Also, the fees can add up when choosing this route.

This doesn’t mean you should give up on Bitcoin investing with a Self-Directed IRA. Royal Legal Solutions may be able to help you eliminate the custodial overhead. Many of our clients are Bitcoin investors who enjoy direct control over their IRA investments. Start with our investor quiz to see if you can take advantage of our custodial services.

#3 Choose a Good Cryptocurrency Exchange

Once your Self-Directed IRA is setup and you have direct access to your funds, you’re ready to purchase Bitcoin. Choose a reputable exchange and understand its fee structures. More importantly, be aware of any security flaws and hacking issues. Currently, Coinbase and Kraken are some of the most reputable exchanges.

#4 Choose a Good Cryptocurrency Wallet

For those new to cryptocurrency, this step may seem like the hardest to understand. A cryptocurrency wallet isn’t a physical wallet, although it can take physical form as a hardware digital wallet. Wallets are accessed via a private key, which is a hexadecimal code that you should guard just as you would a security box key. Like a bank account, the wallet holds your balance and a reference to all transactions. It’s also where you can send and receive currency. Think about security when choosing a wallet. Online wallets are convenient and usually offer a mobile version. However, they are susceptible to hackers. Hardware wallets are more secure because they hold the private key in an offline, unhackable device.

#5 Keep Your BTC Investments in Compliance

The “self-dealing” rules that apply to other alternative assets also apply to Bitcoin. For instance, an investor can’t sell Bitcoin to his own IRA nor can any of his family members. This can disburse the IRA or lead to a taxable event. Also, be mindful of annual reporting requirements which require market valuations similar to real estate properties.

#6 Enjoy Tax-Deferred Earnings

With a Self-Directed IRA you can apply the tax-deferral benefits enjoyed by other alternative investments towards Bitcoin. Bitcoin investments can grow unhindered as taxes aren’t applied till funds are disbursed, which can mean decades of growth.

#7 Explore Other Cryptocurrency Investments

Bitcoin is the most widely-known cryptocurrency. However, once you’ve gotten your feet wet in Bitcoin investing, you can expand towards others currencies such as Ethereum and Litecoin. Like Bitcoin, Litecoin has enjoyed tremendous growth. It’s second to Bitcoin in market capitalization, followed by Ethereum and Ripple.

When expanding your Self-Directed IRA, consider what advantages rival currencies have as an alternative to Bitcoin. For instance, Litecoin enjoys faster transaction times and a larger coin supply limit of 84 million compared to Bitcoin’s 21 million.

Start Investing Today

Like any other investment, investors should complete their due diligence, choose the right custodian and be aware of custodial fees. Check out our Using Your IRA to Invest In Crypto (4 Steps) article while you're at it.

Lastly, keep Bitcoin investments in compliance with IRS regulations. The unique steps Bitcoin investors need to make may be overwhelming at first. They include choosing a cryptocurrency exchange and digital wallet. However, once investors get their feet wet, they’ll be a step ahead in expanding their Self-Directed IRA towards other cryptocurrencies. For now, investors could start off with Bitcoin and other private investments using a Self-Directed IRA.

Renting To Tenants With Dogs: What Landlords Need To Know About Liability

We’ve all heard of horror stories about the dog owner who had to go to court because his/her dog bit a child at the park or snapped at the pizza delivery guy.

These cases can often elicit strong emotions. Dog lovers can empathize with the dog owner, whose otherwise gentle furry friend is maligned as a dangerous threat.

However, anyone who's seen an obviously untrained dog run wild as the irresponsible owner stands idly by can emphasize with the victim.

As a landlord, you may consider yourself the uninvolved bystander when a biting incident occurs. However, this is not always the case.

In this article, we’ll review your responsibilities as a landlord when it comes to renting to tenants with dogs. Our four legged friends can come with some unexpected liability issues, so read on.

Interested in learning more? Read Pet Ownership Laws & How They Can Bite You In The Assets.

Power to Remove a Dangerous Dog

One of the most important things to keep in mind is that landlord liability is rare when it comes to incidents involving a tenant’s dog. You can read more about dog bite liability here. There are only two scenarios in which a landlord can be held accountable.

The first scenario is when a landlord has previous knowledge of a dangerous dog and also has the power to remove that dog. Both conditions should be met in order for the landlord to be held accountable. For instance, David is the new landlord of a building where the old owner, according to a one year lease agreement, allowed one tenant to own a dog. David knows of this dog’s history of biting both guest and other tenants. In this case, David wouldn’t be liable if a biting incident occurred because the dog’s owner had a prior agreement with the previous landlord.

Although David met the condition of knowing about the dangerous dog, he didn’t have the power to remove the dog. In this case, it’s still wise and responsible for David to manage the situation. He can attempt to remove the dog through eviction, request the dog be kept indoors or erect a fence to prevent further incidents.

Previous Knowledge of a Dangerous Dog

Knowledge of a dangerous dog isn’t as cut and dry as it seems. For instance, Ron who is the landlord of a property with a dog who barks and growls at everyone who passes by may have an intuition that the dog could be dangerous. The entire building and neighborhood may be irritated with this dog’s constant barking and mean demeanor. However, this doesn’t mean Ron has actual previous knowledge of the dog being a danger to others. The key word here is “actual knowledge.”

Actual knowledge means Ron knows of a past attack, such as a biting incident or threat made by the dog. Since determining what constitutes a threat can vary greatly depending on how individuals interpret a dog’s actions, it’s important to study past cases. Both Colorado and New York had cases where landlords were found liable for attacks because they ignored overwhelming evidence of potential danger by a dog. In the Colorado case, overwhelming evidence included a previous threat towards the landlord’s own grandchild.

Harboring a Dangerous Dog Can Lead to Liability

The second scenario in which a landlord can be held liable for an incident involving a tenant’s dog is if the landlord also harbored or carried out control over the dog beyond simply just renting out property to the dog’s owner. A good rule of thumb to remember here is that if a landlord in any way manages or cares for a dog, he/she will hold the same accountability as the dog’s owner.

Caring for the dog can include bathing, walking or feeding the dog. In a 2004 Wisconsin case, the courts ruled a landlord not liable for an attack involving his tenant’s dog. The dog was kept in an area adjacent to both the tenant’s and landlord’s dwellings. However, the landlord was not found to “harbor” the dog since he didn’t manage or otherwise care for the dog. He simply allowed the dog in the wooded area adjacent his residence.

Liability for Dog Attacks Off the Rental Property

Landlord liability for incidents that occur outside the landlord’s property can be as equally confusing and require a good asset protection lawyer. Based on past cases, landlords can be held liable for attacks that happen off property. Thus, if you know that a tenant’s dog poses a threat, don’t let it roam around freely and excuse it as the owner’s liability. A court might not agree and instead deem you as the landlord liable. Speak to the tenant about safeguarding his/her pet.

Rental Property Liability Protection

As you can see, determining liability when it comes to incidents involving a tenant’s dog can be complicated. In general, it’s rare for courts to deem landlords liable. However, this doesn’t mean that landlords should take their chances. Rental property liability protection may not be the most exciting aspect of real estate investing, but it is a requirement.

While we can’t do a background check on every dog on your property, we can help you come up with a liability protection plan that can safeguard you against animal attack lawsuits and other often overlooked liabilities. Contact our experienced legal professionals today.

What Assets Are Protected in Bankruptcy?

If you’ve been hit by financial hardship, filing for bankruptcy can offer you a way out of crippling debt. Bankruptcy is a court proceeding that can allow businesses or individuals freedom from their debts while also providing creditors an opportunity for repayment.

However, before you make this move, it’s essential for you to understand how a bankruptcy will affect your assets. This article will offer information on what assets are protected in a bankruptcy and how bankruptcy exemptions work.

Chapter 7 vs. Chapter 13

The first important decision in filing for personal bankruptcy is whether to file under Chapter 7 or Chapter 13. This choice will play a significant role in what assets you are able to keep.

Chapter 7. Sometimes called a “straight bankruptcy,” Chapter 7 is the most common type of bankruptcy proceeding. Under Chapter 7, qualifying individuals, partnerships, LLCs, or corporations can eliminate most of their unsecured debts (and some secured debts) through liquidation. When you liquidate assets, you make cash available to pay your creditors.

When you file for Chapter 7 bankruptcy, creditors are no longer able to garnish your wages, harass you with phone calls, or initiate lawsuits against you. However, Chapter 7 exemptions typically apply only to your legal residence, not to any property you own as an investment.

Chapter 13. Under Chapter 13, you can keep all your property, including your investment property, but you must pay your creditors a portion of what you owe according to a reorganized three- to five-year repayment plan.

The amount you must pay certain creditors under Chapter 13 depends on how much property you can exempt. Here’s are some examples of how it works:

You must repay your creditors at least the value of your investment property. (This rule is intended to ensure creditors receive at least as much out of a Chapter 13 case as they would under Chapter 7.)
You can avoid foreclosure by rolling a few missed payments on your investment property into your Chapter 13 repayment plan and pay it back over three to five years.
You can request that the judge lower the amount you owe on certain types of investment real estate to its current value. However, the downside of this strategy, called a “cramdown,” is that you will have to pay back the entire new loan amount during the new three- to five-year repayment plan.

What Assets Qualify For Bankruptcy Exemptions?

The purpose of bankruptcy is not to strip you of everything you own. The courts understand that if you lose everything, the legal proceeding is at best counter-productive. There are both state and federal laws to protect some of your property from creditors even if you don’t file for bankruptcy.

However, you must claim your exemptions when filing your bankruptcy petition in order for them to be protected. And, as we have explained, the court handles exemptions differently depending on whether you file a Chapter 7 or a Chapter 13 petition.

Some states require you to use their list of state exemptions. Others allow you the option of choosing either its exemptions or the federal system’s set of exemptions. You cannot combine the two sets. The state laws you qualify to use depend on where you have lived over the past two years.

Bankruptcy law views property under the lens of necessity. Property that you can keep (exempt property) generally includes items that are deemed necessary for living and working purposes. Property that you have to give up (non-exempt) includes items that fall outside what the court deems the petitioner requires for living and working.

Under Chapter 7, exemptions typically apply only to your residence, not to any property you own as an investment. Investment real estate, including rental property, is generally not exempt.

Here are some typical examples of exempt property:

Vehicles (up to a specific value)
Clothing (that is reasonably necessary)
Household goods and furnishings (that are reasonably necessary)
Household appliances
Jewelry (up to a specific value)
Pensions
A portion of home equity
Tools necessary for work (up to a specific value)
A portion of unpaid earned wages
Public benefits, including Social Security, public assistance, and unemployment funds accumulated in a bank account)
Any personal injury damages

Here is a list of property that typically is not exempt:

Cash, bank accounts, stocks, bonds, and other investments
Cars, trucks, or boats not needed for everyday transportation
A second home or vacation home
Expensive musical instruments (unless the debtor is a professional musician)
Collections of art, jewelry, stamps, coins, and other valuable items
Family heirlooms
Expensive show dogs or racehorses (now you know why we used a photo of a horse with this article!)

Filing for bankruptcy is never an easy decision since it comes with long-term credit and financial consequences. If you own real estate investments, the decision is even more challenging.

However, many investors are facing unique challenges these days. If you think filing for bankruptcy might be the right decision for you, it’s wise to take the time to consider all the ramifications and consult a trusted legal and financial professional.

Photo by Marylou Fortier on Unsplash

What Are Workout Agreements In Real Estate Investing?

Declining property values and the travel and business shut-downs during the pandemic have played havoc with the balance sheets of many real estate investors.

When faced with red ink, some individuals opt to liquidate their assets, while others prefer to negotiate with their creditors. One way to negotiate a debt obligation is with a workout agreement.

A workout agreement (also called a settlement agreement) is a contract made between you and a creditor that allows you to “work out” or renegotiate the terms of a loan. A real estate workout is not a repayment of a real estate secured loan nor a resolution achieved by way of a foreclosure. Instead, it is a negotiated settlement that establishes a new agreement between the two parties.

This article will explain the benefits of a workout agreement and what you need to know before entering into one.

Who needs a real estate workout agreement?

The idea behind a workout agreement is that it should be mutually beneficial to both parties. A borrower who is in default avoids foreclosure, and a lender gains a greater chance of recouping the loan principal and interest without having to foreclose. The lender also avoids the expenses of any debt recovery efforts.

Not every lender will agree to a workout agreement, and those who do can vary widely in the terms they accept. Typical workout agreements involve extending the terms of the loan or rescheduling the payments.

The right solution depends on the following factors:

type of property (built or under construction; income-producing or not)
type of loan (short-term, long-term, or construction)
liquidation value of the property as compared to the unpaid loan balance
amount of income (if any) generated by the property
long-term prospects for the property
financial status of the borrower

Types of real estate workout agreements

Workout agreements can be used for any type of loan, with the exception of government-backed student loans. Here are some of the different types of real estate workout agreements.

Modification – Changing the terms of an existing mortgage (usually temporarily).

Deed change – Granting the deed to the creditor instead of a foreclosure

“Friendly” foreclosure – Selling the property back to the debtor (or another party) with a clean title after foreclosure.

Short sale –Selling the property to a third party in exchange for debt forgiveness.

Short refinance – Refinancing the property for a loan amount less than the original amount.

Repayment plan – Making a down-payment on the balance and promising to pay the balance over time.

Repurchase after foreclosure – Buying back the property after foreclosure.

Forbearance –Discontinuing legal action in exchange for the borrower’s promise to take action (such as listing the property with a real estate agent).

Conversion – Changing an amortizing loan to an interest-only loan

Preparing for a workout agreement

Both the borrower and the lender should carefully consider the terms of the agreement before signing a new loan document. Here are some factors to consider:

Notification – The borrower should give the lender as much advance notice as possible of an inability to meet debt obligations. Most of the time, lenders are more likely to agree to a workout agreement if they have been notified of a possible default on the loan. Giving advance notice shows that the borrower is someone the lender can trust.

Honesty – A lender is not obligated to amend the terms of a loan, so the borrower helps their case by being as flexible as possible in accepting terms set by the lender. However, it is in the lender’s best interest to help the borrower as much as possible.

Tax implications – Although a workout agreement won’t damage a borrower’s credit score as much as a foreclosure, it will have a negative impact. Also, the IRS views any loan reduction or loan cancellation as taxable income. That means the borrower could end up owing more taxes for the year the workout agreement is signed.

Due diligence – Both parties must perform due diligence on issues surrounding the troubled loan. A pre-workout agreement is an important step for discussing specific problems with the loan, the goals of a workout agreement, and the terms of the contract.

When a loan is in arrears, it’s a bad situation for both the borrower and the lender. Just as both parties have something to lose in a foreclosure, both have something to gain with a workout agreement. Working together on a mutually beneficial solution beats the alternative every time.

Lawsuits Are A Plague On Small Businesses—Here’s What You Can Do

Small business owners take a lot of risks to be successful. Nothing ventured, nothing gained, right?

But risks can create stress. Dealing with difficult customers, and worrying about employees all contribute to the headaches. Even a self-employed real estate investor who doesn't have "customers" or "employees" has a ton of problems to keep him or her awake at night.

The threat of litigation is another major concern for business owners. About three-quarters of all owners worry about this on a daily basis.

Lawsuits Are The Scourge of the Small Business Community

Over half of all civil lawsuits involve small businesses. A company with $1 million in earnings wastes about $20,000 per year on lawsuits. In sum, small businesses pay $20 million of their own money to settle tort liability claims or satisfy jury awards.

While major corporations have the resources to devote to both the time and costs of lawsuits, as an owner of a small real estate investment business, you do not. Therefore, you must protect your assets and give potential plaintiffs no incentive to sue you.

Insurance Is Not the Answer

Most diligent business owners turn to general liability insurance and similar coverages to protect their assets. While well-intentioned and a necessary step for any company, small business insurance is not enough. That’s because insurance companies are businesses as well. They readily accept your premiums and may even be helpful for minor issues like a slip-and-fall case.

But things turn sour when you file a big claim. You may get dropped and have to go through the hassle of suing the insurance provider to honor your claim. Instead of helping, the insurer will blame you or manufacture exceptions to your policy that void the claim.

Protecting Your Small Business Assets

So you can’t rely on insurance when you face a major lawsuit targeting your real estate assets. Instead, you must rely on another asset protection strategy. This involves two components—anonymity and series LLCs.

Anonymity

The prospect of lucrative settlements or significant jury awards drives lawsuits. In other words, a small real estate investment business must have substantial assets to be worth suing. If you can hide your assets from plaintiff lawyers, you take away their incentive to sue.

The way to hide assets is through anonymous trusts. These own your real estate properties instead of you.

Here’s how they work. You have real estate investments. Each piece of property is owned by an anonymous trust, and the business holding entity is an LLC. This makes it difficult for a plaintiff’s attorney to trace the property back to you. That’s because when the LLC is filed, the anonymous trust is listed as its member.

When the plaintiff’s attorney researches county records to find the owner of your property, they will simply see the trust listed as the owner. However, trusts are private documents not filed with the state or county. Therefore, the lawyer runs into a brick wall.

Series LLCs

This structure is a great way to protect real estate assets. It works like this. Assume you own three properties in a city, located at:

100 North St.
100 South Blvd.
100 East Rd.

You create a parent LLC, called the series LLC. Then you form a separate LLC for each piece of property. For the three properties here, you would have the parent LLC and three subordinate LLCs. One owns the 100 North St. property, another the 100 South Blvd. property, and the third owns the 100 East Rd. asset.

This structure has several advantages. The main one is that if a plaintiff’s lawyer wants to file a lawsuit against you for something that happened at the 100 North St. property, they will face two major hurdles. First, because of the anonymous trust, they will have a hard time pinning down the actual owner. Second, the only asset impacted by the lawsuit is the 100 North St. property. The other two properties, at 100 South Blvd. and 100 East Rd., are untouchable. So are all your other business assets unrelated to these properties.

In addition to making suing difficult and unproductive for plaintiffs’ lawyers, series LLCs have several other advantages:

Low startup costs. Your lawyer can easily and inexpensively set up the parent and subordinate LLCs.
Less complexity. A series LLC, with its multiple LLCs, is a much simpler business structure than a similar setup with a parent corporation and subsidiary corporations. Also, the documentation and requirements are easier for an LLC than a corporation.
Lower sales tax. While rules vary from state to state, you may be able to avoid any rent paid by one LLC to another.
Taxation. In most states, only the parent LLC files a tax return. This simplifies an already complex tax filing.

The Series LLC Experts

The attorneys at Royal Legal Solutions focus on protecting our small business clients’ real estate investments and minimizing taxation. Part of this protection may involve the use of anonymous trusts and series LLCs. With this asset protection strategy, you can stop worrying so much about lawsuits and concentrate your time on real estate investments.

When Real Estate Investors Hire Registered Agent Services For Their LLCs

As alluring as owning a real estate investment company may seem, those beautiful profits always come with a few risks.

To minimize those risks, you have to set up a limited liability company (LLC). These corporate structures, paired with the right legal tools, give your business a basic level of personal liability protection, asset protection and tax benefits.

And the logical thing would be to set up an LLC in your home state, right?

Maybe. But what if you happen to live in a state that isn’t friendly to small business?

The quick and easy solution is to form an LLC in another state, one where the tax laws are a little more favorable to what you're wanting to accomplish. This strategy can work brilliantly, and it’s 100 percent legal and even commonplace.

In fact, it’s something we help our clients do every day, every year.

But it comes with a caveat:

To remain on the right side of the law, you are required to name a person (or company) to act as your registered agent. This is the person who is responsible for sending and receiving all of your company’s legal correspondence.

If you have an out-of-state LLC, your registered agent is your point person for business matters in the state where your company is formed. This agent will be legally responsible for maintaining your LLC’s legal and tax documents and for sending and receiving all of your company’s legal correspondence.

A Professional Registered Agent Means You Sleep Easy

Your registered agent serves as your LLC’s “face.” Think of this person as your brand ambassador, but the duties go beyond simply making you look cool on Instagram. Your agent bears the responsibility for your legal and tax documents.

To have the peace of mind of knowing you are meeting the business requirements of the state where you incorporate, you need someone to assist you. Designating a registered agent for your LLC is one thing, but a registered agent service for LLCs will give you this peace of mind.

Can I be my own registered agent?

Some investors wonder if they can also serve as their LL's registered agent. Sure you can! However, you need to know this may be tedious. Will you be able to properly keep track of your LLC's documents?

Unless you’re an attorney or a CPA, you probably don’t want to serve as your LLC's registered agent. Residency can be difficult, even if you’re splitting your time between states. You must be able to perform the registered agent’s role competently throughout the life of your business. For this reason, the vast majority of successful real estate investors do not serve as their own registered agents—and they’re better off for it.

Be sure to check out our article: Do I Need A Registered Agent In Every State?

Should I get a registered agent service for my LLC?

Ideally, it is best to have a qualified professional as your registered agent. There are law firms, CPAs and other professionals who can act as registered agent for real estate investors. A qualified legal practitioner will always be aware of changes in the law. He/she has enough knowledge in matters of law.

Every state is different, but here are three common rules of thumb when hiring a registered agent for your LLC.

He/She must be a resident of the state.
He/She must have a physical address in the state.
He/She must operate during normal hours from Monday through Friday.

How Can a Professional registered agent service help?

Remember, to remain within the law, you are required to name a person (or company) to act as your registered agent.

Many real estate investors form an LLC in another state (at Royal Legal Solutions, we recommend the Texas LLC). This strategy can work brilliantly, but to remain within the law, you are required to name a person (or company) to act as your registered agent. As mentioned, this is the person who is responsible for sending and receiving all of your company’s legal correspondence. He or she will be legally responsible for maintaining your LLC’s legal and tax documents.

Registered agent services for LLCs come with a few other perks:

Peace of mind that comes with knowing someone for your LLC registered agent is is handling all legal issues
You get informed about important information and legal changes; your registered agent has everything covered.
Anyone can forget things, but your registered agent service will take note of every deadline and never miss out.

Conclusion

Each state has different rules for having a registered agent. You must retain registered agent services n the state where your LLC was created or does business.

Not designating a registered agent for your LLC is downright reckless. If you get caught, you can expect a legal backlash that may include anything from fines to exclusion from the court system, which will make it very difficult (and illegal) to run your business. Some states may even pursue criminal charges.

Knowing this, would you really risk prison time to save the $45 to $95 it’ll cost you to hire a registered agent service for your LLC? This tax-deductible fee should be regarded more as a small investment in asset protection than a shrewd cost-cutting opportunity.

A professional agent can help you focus your efforts where they belong: on your business.

Equity Stripping for Real Estate Investors

Make yourself an unattractive target for lawsuits and creditors with equity stripping.

As real estate investors, one key issue for protecting our assets is making sure we have very little or no equity exposed to the world. Why? Quite simply, the equity in a property is what can be seized and sold off in the event of a successful lawsuit and judgment against you. So what’s the smart investor to do?

Fortunately, this is where equity stripping comes into play.

What is Equity Stripping?

Equity stripping is any process that will reduce the value of a given real estate asset. It is a classic among asset protection strategies, well known for being a tried-and-true method of creditor protection. Equity stripping may be used to protect your home or an investment.

Wait. I want to look poorer than I am?

Yes, you do. It’s the smart play. You can invest and earn all you like yet still appear to qualify for food stamps. The illusion that you own little to nothing makes initiating a lawsuit incredibly difficult for the other side.

Is Equity Stripping legal?

Equity stripping makes you less desirable to sue because you appear to have less than you actually do. Some investors wonder if this is ethical or even legal. The answer is yes, provided you set everything up before a creditor or lawsuit comes your way. Be proactive!

We Simplify Equity Stripping For Real Estate Investors

Don’t attempt equity stripping alone. There are some tasks that require a professional’s oversight, and this is one of them. Fortunately, the pros at Royal Legal Solutions are happy to help you out.

Who Needs Equity Stripping?

Equity stripping is a viable solution for many types of real estate investors and even ordinary homeowners. Therefore the answer to what type of person needs this service can be varied and diverse.

For instance, not all laws protect the equity in a homestead equally across the United States. For those who have paid off more on their home than is statutorily protected, equity stripping is one legal method for protecting that homestead.

DOMESTIC EQUITY STRIPPING
There are many methods for equity stripping. Anything that encumbers an asset on purpose, or moves it from a position of exposure to safety, could be considered a form of equity stripping.

For most of our clients, we recommend domestic equity stripping. To employ this tactic, you use one of Royal Legal Solutions’ Traditional LLC structures. You can then use the LLC to strategically issue notes on the properties you own.

Which of these options is most appropriate for you?

That will depend on your needs and the advice of your attorney.

FOREIGN AND OFFSHORE METHODS
Offshore equity stripping is legally similar but has a key difference. With this method, you would need an offshore trust to issues notes on your properties. This type of offshore trust, also known as a bridge trust, offers additional benefits. However, while the offshore option is highly secure, there is a price trade-off. Bridge trusts can cost thousands to establish.

CREATING YOUR OWN MORTGAGE COMPANY
Another means of harmless debt creation we have used is instructing investors like you on the less conventional, although far easier-than-it-sounds, tactic of creating your own mortgage company. And there are even more ways to get the job done.

The Personal Property Trust: An Often-Overlooked Asset Protection Tool

Asset protection is a crucial component of financial planning for any real estate investor. There are many tools you can use to keep your property out of the clutches of creditors and would-be-litigants, and we’ve talked about some of them a lot on this site.

While Land Trusts, Series LLCs, and anonymous trusts are some of my favorite tried-and-true asset protection methods, a financial planning tool that doesn’t get as much attention as it should is the personal property trust.

With this article, we're going to change that!

What Is A Personal Property Trust?

In general, a trust is a type of legal arrangement where a trustee holds title to specific property and manages it for the benefit of the trust’s beneficiaries. Trusts can be revocable, which means the trust can be altered or canceled at any time while the person establishing the trust is still alive. They can also be irrevocable, which means they cannot be modified or revoked.

Like a Land Trust or living trust, a personal property trust is a type of revocable trust. Whereas the Land Trust is used to hold real property, the personal property trust is used to hold title to personal property assets such as vehicles, boats and mobile homes.

Whenever an asset needs to be registered and included in public records, you can use a personal property trust to keep your ownership information private.

Since trustees must manage the trust assets as directed by the trust instrument, you can use a trust to transfer legal ownership and protect your identity while essentially maintaining complete control over the trust property. Generally, the sale of trust property requires approval from the beneficial owner, and the trustee cannot make the decision alone. Naming yourself as the beneficiary of a personal property trust can keep you in control of your assets.

What Are The Benefits Of Putting Your Property In A Trust?

The primary benefit of using a personal property trust is privacy. When you place your assets in a personal property trust, public record registrations will show the trust as the owner instead of listing your name. If you choose a privacy-protecting name for your trust, there will be no indications in the public record that you own the property.

A few additional benefits of using a personal property trust include:

Protecting your assets from lawsuits and other creditors
Avoiding the expensive probate process when leaving assets to trust beneficiaries
Flexibility in the types of personal property that can be placed in a personal property trust
The ability to retain control over trust property
The option to add and remove property from the trust

When Should You Use a Personal Property Trust?

As a real estate investor, there are several ways you can take advantage of the protections offered by a personal property trust. Here are a few of the most beneficial ways to use personal property trusts to help keep your real estate investments safe and private.

Mortgages

One of the most common uses of personal property trusts is to hold mortgages, since the ownership information for this type of asset can be found through a public records search. As a real estate investor, you may want to consider creating a separate personal property trust for each property for which you have a mortgage. This strategy will allow you to keep your ownership information private and avoid links between your various properties.

LLCs

Savvy real estate investors often use an LLC to own real estate directly or name an LLC as the beneficiary of a Land Trust. To add another layer of separation and anonymity to your asset protection strategy, you can use a personal property trust to hold your membership interest in the LLC.

If you use an LLC as part of your real estate asset protection plan, it’s important to remember that, in most states, LLC membership is included as part of the public record. One way to keep your LLC interests private is to list a personal property trust as the LLC member and name yourself as the trust beneficiary.

Vehicles

Any vehicle—including cars, trucks, and motor homes—that must be registered with the Department of Motor Vehicles is generally part of the public record, which can make your personal data open to public search. You can avoid this by titling your automobiles to a personal property trust.

Given its various uses, a personal property trust can be a valuable tool for real estate investors, as well as people who haven’t caught the real estate bug (yet). No matter how you use your personal property trust, it is a practical but often-overlooked component of a successful asset protection plan. When deciding what financial planning tools are best for your real estate investment plan, it’s vital that you seek the input of an experienced asset protection attorney.

What Is Passthrough LLC Income for Tax Purposes?

There are two short answers to the title question: yes, and hell yes.

But don't just take our word for it. Passthrough LLC income is a hot topic in the investment community. If you're not sure what that means, you're not alone. Read on to learn about what exactly passthrough income is, how it impacts your LLC, and what benefits you will reap from it.

What is 'Passthrough' Income?

Passthrough LLCs allow you to collect the profits from your business as part of your personal income tax. The LLC itself is not taxed, but its owners are. This allows you to save substantially, simplify filing, and enjoy more of your hard-earned profits.

Businesses love this feature so much that at the time of this writing, roughly 90% of entities take advantage of passthrough income. While this access used to be primarily the domain of giant corporations, even the smallest business can also take advantage.

How Does a Passthrough LLC Benefit Me?

The most obvious benefit of passthrough entities is that it saves you tremendously on taxes. Opting out of passthrough benefits would mean you would essentially have to pay taxes on your income twice--both on your personal and your business tax returns. Few among us have the means or desire to pay the taxman twice. Fortunately, businesses don't have to if they take advantage of passthrough taxation. This is available for any type of LLC, including our personal favorite, the Series LLC.

What About the Taxman?

While passthrough has always had the benefits discussed above, there are even more perks you can take advantage of when Tax Season rolls around. Below are some of our favorite perks, along with a little update about the 2018 Tax Bill.

Taxes Are Assessed At Your Individual Rate. This is much cheaper for the average investor than paying corporate taxes, especially if you're in the early stages of developing your real estate empire.
New Law Allows For Deductions. The 2018 Tax Bill shows even more love to small businesses and investors by allowing for additional deductions for passthrough entities. Business owners (that means you, even if you're the sole owner of an LLC) can now deduct up to 23% of the business's income on their personal returns, allowing for even greater savings.
Taxes are Streamlined and Simplified. One return means a lot less math for you. But of course, if you're struggling, are new to investing, or have a brand new entity, seek the help of a qualified attorney and CPA to ensure you're on the up and up.

Can I Get Passthrough Treatment for Other Entities?

You bet! S-Corps, Limited Partnerships, and many other types of entities are eligible for passthrough taxation. Of course, we recommend the Series LLC for real estate investors. All of the information above applies to the Series LLC the same as it would to its Traditional counterpart.

That's all for our discussion of passthrough income for LLCs and Series LLCs. That wasn't too painful now, was it? You learned the basics in under ten minutes, but please feel free to reach out for personalized recommendations by taking our Tax Discovery Quiz below.

Keep more of your money with a Royal Tax Review

Find out about the tax savings strategies that you can implement as a real estate investor or entrepreneur by taking our Tax Discovery quiz. We'll use this information to prepare to have a productive conversation. At the end of the quiz, you'll have an opportunity to schedule your consultation. TAKE THE TAX DISCOVERY QUIZ

Which Type of Business Entity Needs an Employer Identification Number (EIN)?

Businesses pay taxes. It is a truth as old as time. However, how a business entity pays taxes vary. For many, the Internal Revenue Service (IRS) requires them to file for an employer identification number (EIN).

The EIN, also referred to as a taxpayer identification number (TIN), is a unique number assigned by the IRS that allows it to monitor any payments, wages, or other financial transactions that occur through your daily business activities.

Furthermore, if you plan to open a business bank account, an EIN will help you establish one that is independent of your own personal account.

Does a general partnership need an EIN? What about an LLC taxed as a corporation? To find whether or not your business entity requires an EIN, keep reading.

Business Entities that Do Require an EIN

C Corporations: C corporations are those considered to be your “standard” ones. These entities are required to file a Form 1120 (Corporate Tax Return) and pay corporate-level taxes.
S Corporations: S corporations, defined by Subchapter S of the Internal Revenue Code, are pass-through entities. S corporations are required to have an EIN, but they file a Form 1120S (Informal Federal Return). Unlike the C corporations, any profits or losses incurred by the S corporation are filed along with the owner’s personal returns.
General Partnerships: General partnerships are required to have an EIN for taxation purposes. In a general partnership, all partners must report profits and losses on a Schedule K-1 on their personal income taxes.
Limited Partnerships: For taxation purposes, a limited partnership operates much the same as a general one and will need an EIN. A limited partnership typically has a general partner who manages the business and limited partners who act more as investors. The general partner must file a Return of Partnership Income Form 1065 that includes any losses, profits, and distributions issues to the limited partners. The other partners will then receive their Schedule K-1 from the general partner.
Multi-Member LLCs: The IRS treats multi-member limited liability companies (LLCs) much as they do a partnership. The LLC must submit a Form 1065; a Schedule K-1 with any allocated distributions must also be filed. Members will also be required to file a Form 1040 for their share of the LLC as well. This is true whether the LLC hires employees or not.
LLCs Taxed as Corporations: As with C and S corporations, if you opt to have your LLC taxed as a corporation, you must obtain an EIN.
Single Member LLCs with Employees: If you plan on hiring employees within 12 months, or already have employees, your LLC must have an EIN. The IRS may provide you with two EINs, however. Any employment taxes that are paid, must be reported through the use of an LLC-specific EIN. However, any finances passed to an LLC member must be reported under a member EIN instead.
Sole-Proprietorships with Employees: As with the LLC with employees, a sole-proprietor who hires employees with need to obtain and EIN too.

Business Entities that Do Not Require an EIN

Single-Member LLCs without Employees: Most single-member LLCs that do not hire employees will not need to obtain an EIN. A personal social security number (SSN) will suffice. However, if the LLC has a Keogh plan or transports anything that will incur a federal excise tax, an EIN will likely be needed.
Sole-Proprietorships without Employees: Sole proprietorships without employees can use their SSN as well. It is important to remember, however, that some lenders may not provide a loan without an EIN.

Business Taxes

The nuances of the tax world can be confusing and hard to understand. If you run a business and would like to discuss taxes with a professional, call Royal Legal Solutions today to set up a consultation. Our professionals have years of experience helping clients make the most of their business while remaining in compliance with all laws and regulations.

Interested in learning more? Read How to Get an Employer Identification Number (EIN) for a Foreign Entity and When Does a Sole Proprietor Need an EIN?

2021 Is A Critical Year for Estate Planning—A Trust Is A Great Start

Real estate investors were thrown a few curveballs last year, to say the least.

The stress and uncertainty of 2020 motivated a lot of you to stop procrastinating and get your financial affairs in order. Trust me ... Financial planners and asset protection attorneys have been working overtime.

On top of an unprecedented global pandemic, another election cycle brought the prospect of legislation that could change how our businesses (and our estates) are taxed.

With the current estate credit set to end in 2025, proactive business owners were calling us before COVID spread throughout the globe. But the events of 2020 have even more of you thinking about the gloomy prospects for recession, disability or death.

Whatever happens with the pandemic and the fallout for landlords, 2021 is shaping up as a critical year for estate planning because of President Joe Biden's proposal to lower estate tax exemptions. Biden proposals include limits to the gift, estate, and GST exemption amounts a taxpayer can take. According to The National Law Review, it is now more important than ever to create an estate plan or review the terms of an existing one.

Worried yet?

Don't be. As with many things in life, a little preparation goes a long way. You have a lot of options.

For example: Setting up a trust, which allows a third party—or trustee—to hold assets on behalf of your beneficiaries, can offer you valuable peace of mind. With a trust in place, your heirs will not have to go through the time and expense of probate. A trust also allows you to protect your assets, maintain privacy, and reduce estate and gift taxes.

Even if you have an estate plan in place, it is critical to update it each year to allow for life’s many changes, including births, deaths, weddings, divorces, illnesses, and children reaching the age of majority.

In this article, we'll examine one of the primary components of estate planning—selecting who will serve as your personal trustee. But first, let's look at the changes that 2021 could be bringing to the way estate planning attorneys like me handle our clients' affairs.

What Estate Law Changes Will 2021 Bring?

Changes that impact the way we leave assets to our families are afoot. These include:

When he was running for president last year, Biden proposed raising the top rate for the estate tax to 45%. Currently, the first $11.58 million of an estate is exempt from federal estate taxes (a cap set to expire in 2025). Candidate Biden proposed reducing the exemption to $3.5 million per individual ($7 million for a married couple)—a change that would subject more estates to higher taxes.
The new Biden administration may also eliminate a current tax policy called "stepped-up basis," where a person who sells an inherited asset has to pay capital gains tax on its appreciation only from the date of the estate owner’s death—not from the time it was originally purchased.
Although Biden's proposals would only apply to those making $400,000 (Biden pledged not to raise taxes on people making less than that), the changes will strip away a big benefit to those who inherit real estate.

The world is changing. Your family and your needs are changing. Estate plans should be updated every year to reflect these shifts, to give you peace of mind and preserve your wealth for your loved ones.

Creating a Trust Is A Great Start

Updating your estate plan for 2021 means finding ways to control where your assets will go should you die or become otherwise incapacitated. Establishing a land trust or another kind of trust can do exactly that.

Determining who will serve as your trustee is a key step. This individual acts as a fiduciary, overseeing the management of property owned by the trust. The person (or persons) you choose must have a clear understanding of the role. The primary expectations of a personal trustee include:

acting in honestly and in good faith
working with due care, skill, and diligence in the best interests of beneficiaries
avoiding conflicts of interest
not profiting from the trust

While those duties align with moral responsibilities, the position also comes with distinct hands-on tasks such as paying bills, reporting taxes, fulfilling obligations to beneficiaries, and following all compliance requirements. Making investments may also be part of the job.

Particularly with large estates, the trustee may be exposed to legal action by the beneficiaries of the trust. As you can see, the position or the offer of the position should not be taken lightly. You'll want to make sure the person fully understands the responsibilities and isn't blindsided with them after your death.

In addition to being a trusted friend or family member, a trustee can be a professional (such as your attorney) or an institution (like a bank). You also can to have an individual and an institution serve as co-trustees. A professional trustee can help shift the legal liability of the position away from the personal trustee while keeping them informed and part of critical decision-making.

How is a trustee compensated for their time?

Choosing who will serve as your personal trustee is an important decision. It should be someone who knows you well and who gets along with your family members. It's more than an honor; it's a serious commitment to you and your heirs.

Both personal and professional trustees are entitled to payment for their work. As you might expect, the compensation depends on the size of the estate and the amount of work the position requires.

There is no set fee for a trustee, and most trust documents and state laws state that trustees should earn a "reasonable" amount for the work. What is a reasonable amount? Here are some guidelines:

Check your state's rules on executor compensation. Since a trustee's work is similar to that of an executor, state rules can serve as a guideline. Typically, fees are determined as a percentage of the total value of the trust's assets or a percentage of the actual transactions made.

Choose an appropriate flat or hourly rate. If it is hourly compensation, the trustee should keep a careful log of the time spent handling trust business. And keep in mind that most individuals should not charge the same rate as lawyers or financial advisors.

In some cases, a trustee may not want to receive financial compensation for their work. One consideration is that a trustee's remuneration is taxable as income. But family relationships also can enter into the picture.

For example, a relative may choose to forego payment for their time as a trustee because they view the position as a family responsibility. Others may think that accepting payment could cause friction or strain within the family.

The Takeaway

With the rate of COVID vaccination increasing, many of us are looking forward to returning to some semblance of normal life in 2021. However, we would be wise not to ignore the wake-up call that the pandemic has given us to get our affairs in order. And thanks to legislative changes, investors are faced with a whole new ball game going forward.

None of us knows what the future holds. No matter the size of your estate, you'll gain valuable peace of mind when you create or update your estate plan in 2021.

Should Rental Property Be in an LLC or Trust?

Should rental property be in an LLC or trust? Unfortunately, the answer is not as straightforward as you might think.

Whether you’re planning your will or setting up a company to manage your growing real estate portfolio, you need to know exactly what type of entity you should use to shield your properties from legal trouble. If you make the wrong decision, you could potentially expose your holdings to unnecessary risk, costing you hundreds of thousands of dollars down the road (or, at the very least, giving you a big headache).

So, first, let’s start with a basic definition of "LLC" and "Trust" as they apply to real estate investing.

(If you just want the pros and cons of each option, feel free to scroll down to the bottom of this article).

Why Use an LLC to Hold Your Rental Properties?

An LLC is a limited liability company.

It’s one of the most popular legal entities that a person can set up to operate their business. You don’t need any employees or a board of directors, and you can use it to separate your business assets from your personal finances. That way, if you ever find yourself on the losing side of a lawsuit, the only assets you’ll be forced to give up are those assets held within the LLC (in this case, your rental properties).

If someone sues you and wins, they can’t take away your personally-owned assets (like your car, primary residence, and your kid’s college fund).

Sounds like a pretty sweet deal, right? You could theoretically make some risky moves with the assets you put under an LLC and then dissolve that LLC in case you get into any trouble. The only risk is the asset, right?

Well, not so fast. There are some instances when your personal assets might be at risk, and you definitely shouldn’t start an LLC for the sole purpose of doing something nefarious.

When Does an LLC Fail to Protect Your Personal Assets from Lawsuits?

There are a few instances when, if you use an LLC to hold your rental properties, you’d be putting both your rental properties and personal belongings at risk. Those instances include:

You make a personal guarantee on a debt. When you sign a contract for certain loans, including, in some cases, mortgages and home equity loans, you might have to make a personal guarantee to pay it back. That means that you’re on the hook to pay down the debt even if your business doesn’t perform. Lenders will often require you to make a personal guarantee if your LLC doesn’t have a long-established credit history or cash flow.
You sign a contract with your name, rather than your title with the LLC. Always sign contracts as “John Doe, CEO of Rental Properties LLC,” never just “John Doe.”
You mix up your personal finances with your business finances, or you fail to observe the requirements of your LLC in your state. Keep separate bank accounts and credit cards for your business and personal finances. As soon as you use your business credit card to buy groceries, a lawyer is going to make the argument that you’re using your LLC to protect your personal assets.

Furthermore, an LLC can create a kind of avalanche effect. As soon as one property is attacked under an LLC that holds multiple rental properties, your entire portfolio can take a hit.

Why Use a Trust to Hold Your Rental Properties?

You’ve probably heard about trusts as they relate to estate planning. By putting certain assets in a trust, you can guarantee exactly how and when they’re distributed. This way you can avoid a solid chunk of estate taxes, since the assets in a trust aren’t considered your personal property, or even protect your assets from heirs that are likely to mismanage them.

One solution is putting all of your properties under separate trusts. There are a few different types of trusts: revocable, irrevocable, pay-on-death (POD), and living trusts. For our purposes, we’re just going to focus on revocable and irrevocable trusts.

Revocable trusts allow you to control the assets during your lifetime. These are still considered personal assets, and they’ll be included in your estate taxes.
Irrevocable trusts transfer legal ownership to a trustee, who then oversees the exact details of how the asset should be treated according to the trustors’ will. Since this is no longer technically part of the trustor’s property, it isn’t considered in estate taxes.

What are the Benefits to Using a Trust Versus an LLC?

What are the benefits to putting your rental properties in a trust rather than an LLC?

Just like an LLC, putting your property in a trust can separate your personal assets from your business, so that if you run into legal trouble, you won’t have to forfeit your personal belongings.
It can cut down on estate taxes.
It can distribute liability. If you set up an LLC, you’ll definitely need to buy liability insurance on top of it. Even then, you could potentially lose all of your properties in a single lawsuit. If you put the properties in individual trusts, you spread out that liability.

Should You Put Rental Property in an LLC or Trust?

So, to review, what are the pros and cons of each option?

Putting Rental Property in an LLC Pros

One of the most popular ways to form a corporation. Therefore, it should be easy to file the requisite paperwork and even find guides online to help you with the specifics.
Separates your personal assets from your business assets.

Putting Rental Property in an LLC Cons

You could potentially lose all of your properties in a single lawsuit.
If you don’t follow the requirements for incorporating an LLC (like holding annual meetings and keeping your personal finances completely separate from your business finances), you could open up a lawyer to “pierce the corporate veil.” If this happens, they’ll be able to prove that you’re just using the LLC as a protection from liability while treating it like personal property.
In short, you could open up not only your rental property to potential issues, but your personal property as well.

Putting Rental Property in a Trust Pros

Effectively separate your personal property from your business assets.
By putting each property in its own trust, you can disperse liability.

Putting Rental Property in a Trust Cons

Might require more time and resources.
Less straightforward than simply setting up an LLC.

How To Name A Trust

In this article, we’ll talk about how to name a trust. It’s an often overlooked—but important—part of setting up a trust.

Think of trust as a set of directions for how to handle certain assets. You can control when, where, and to whom they’re distributed. A trustee, an individual or institution, typically handles the distribution of those assets to your beneficiaries.

We’ve gone over the benefits of setting up your rental property in land trusts in past articles. They help protect you from liability in a way that no LLC really can, but if you mess up the name, you could open yourself up to a host of other issues.

Why Do You Need to Know How to Name a Trust?

Why does the name of the trust matter at all? Couldn’t it be anything you want it to be, as long as the directives of the trust are carried out?

Knowing how to name a trust is important to real estate investors for a few reasons:

In order to hold assets, a trust needs to be able to be identified. Without naming your trust, you don’t actually have a trust.
A good trust name can better help banks properly process your loans and other required paperwork.
The typical manner of naming a trust (“full legal name” + “Trust”) can cause you to unnecessarily sacrifice your privacy. Lazy advisors will often guide you in this direction. It’s even worse if you use your full address. The point of a trust is to protect your personal life, your privacy and belongings, from your business dealings. Why would you make it easier for bad actors to know exactly who you are and where you live?

Basic Guidelines for Naming a Trust

So, if you shouldn’t go with the typical way to name a trust (by naming it after your family name or address), what should you do, instead?

Get Creative (But Not Too Creative)

Come up with a list of creative trust names. We recommend that you name your land trust to sound like a fictional company. The only exception, though, is that you typically aren’t allowed to make your trust sound like a lender or other financial institution. You also need to avoid naming your trust after anyone else’s existing LLC.

But it’s important that you don’t get too creative, because you still want banks to be able to correctly categorize your trust based on its name alone. Some attorneys have even talked about clients naming their trusts after their dogs. You want to walk the line between clarity and anonymity.

Try To Keep It On The Shorter Side

When you name a trust, that name will be included when you name any asset in the trust. You can probably imagine how this could quickly spiral out of control if you choose a trust name that’s too long.

Pretend You’re a Celebrity

Celebrities work closely with attorneys to find ways that they can protect their anonymity from the public. This is a good idea for you, too. Land trust rental property should be used to shield you from possible litigation. As we mentioned in that article, no one wants to sue a ghost. The more obstacles you can set up, the more illusive you can be, the better.

Don’t Overthink It

At the end of the day, the best way to choose a trust name is to make sure that it protects your anonymity. If you’re having trouble coming up with a name that both suggests what the trust was set up to do and one that protects your anonymity, either consult with a professional or ask yourself which value is most important to you.

Most of the time, people would prefer to protect their privacy. Having documents clear through banks faster is simply a perk, and not something that you’re necessarily focused on when you’re setting up a trust. Liability and privacy, on the other hand? Those are essential.

Conclusion: How to Name a Trust

What are the main points you need to know before naming a trust?

Try to stay away from the typical. Most advisors, out of nothing but pure laziness, will tell you to name your trust after your last name or address. The whole point of a trust is to shield you and your family from possible litigation. The easier you make it for people to pursue litigation, the more likely it is to happen. Don’t make the mistake of naming your trust in this manner. Come up with something creative instead.
And, with that said, you still want banks to be able to clearly identify what the trust is for in order to clear paperwork as quickly as possible. So, you want to be creative but not too creative. However, this isn’t a hard-and-fast rule. It’s better to stay on the safe side and keep your privacy.
Make it shorter. Every asset in your trust is going to start with the name of that trust. If it’s seven words long and you put multiple assets under that trust, it’s that much harder to differentiate which asset is which.
If you’re still lost, you have two options: consult with a professional ... or just pick something unique.

Aren't Offshore Bank Accounts for Criminals?

Benefits of Using Off-Shore Bank Accounts: The Appeal for the Ordinary Investor

Stability and Control: Break Free of Banking As Usual

Currency Options and Diversification

Asset Protection Benefits of Offshore Banking

Taking Anonymity Even Deeper: Banking Privacy

Greater Selection, Financial Perks

Off-Shore Banking Can Be For Everyone

What Is Inflation?

How Is Inflation Measured?

What Is the Impact of Low-Interest Rates on Banks?

What Is the Impact on People Who Hold Assets?

Key Takeaways

Why Is Operational Anonymity Important?

How Do We Obtain Anonymity?

How Do You Maintain Your Operational Anonymity?

#1 How To Purchase A Home

#2 How To Enter Into A Contract With A Third Party

#3 How To Sell Your Property

What Parties Can You Disclose True Ownership To?

How Should I Disclose True Ownership?

What Happens If Your Anonymity Has Been Compromised?

Conclusion

Wyoming Statutory Trust: A Unique Tool for Savvy Investors

Valuable Evaluation of Pros and Cons

Delaware Statutory Trust: Proven Asset Protection

Promising Security from Delaware's Trust

The Bottom Line: Wyoming Statutory Trust vs. Delaware Statutory Trust

#1 Insurance doesn’t provide asset protection from lawsuits

#2 Think like a wealthy person

#3 What is the most cost-effective way to achieve asset protection for financial freedom?

#4 How does the Series LLC provide asset protection?

Asset Protection for Financial Freedom Wrap-Up

Anonymous Land Trust for Rental Property Asset Protection

Setting Up a Traditional LLC

Benefits of Setting Up a Series LLC for Rental Property Asset Protection

Avoid These Common Situations to Stay Out of Court

Bottom Line: Protect Your Assets

The First Step Is Forming A Series LLC

Real Estate Investing Journey Fundamentals

1. Reduce Your Debt for Maximum Advantage

2. How to Use a Simple Method For Increased Profit

3. The Bottom Line on Mortgages

4. Beware High-Interest Rates

5. Seek Real Opportunities to Generate Wealth

6. Landlord Insurance: Important and Useful Security

Profitable Tips to Give You the Edge

Surging Locations Are Key To Success

Be Shrewd With Rental Properties

Beginners Should Avoid Distressed Properties

The Hidden Benefits of Property Managers

Pros v. Cons of Starting a Real Estate Investing Journey

Real Estate Investing Journey Recap

Highlights of Findings in the Pandora Papers

Offshore Holdings and Their Potential Negative Outcomes

Whose Names Did the Pandora Papers Reveal?

Legitimate Reasons for Creating Offshore Holdings

What Impact Will the Pandora Papers Have on the Future?

How Are the Structures Used by Royal Legal Solutions Different?

How the progressive tax brackets work

Using Your C Corp’s Tax Brackets

Things to consider when using a C corporation to minimize taxes

How to manage income from your C corporation

In conclusion

#1 Landlord Knows - But Does Nothing

#3 Landlord Harbors the Vicious Dog

Dog Bite Lawsuit Payout Numbers

How Landlords Can Protect Themselves

Structure Your Business for Protection From dog bite liability

Bitcoin Gets Attention From Investors

Bitcoin Meets the IRA

<img loading="lazy" class=" wp-image-27280 alignleft" src="https://royallegalsolutions.com/wp-content/uploads/2021/07/invest-crypto.gif" alt="Using Your IRA to Invest In Crypto (4 Steps)" width="376" height="250" />How to Invest in Bitcoin Using a Self-Directed IRA

#1 Do Your Research

#2 Choose the Right IRA Custodian

#3 Choose a Good Cryptocurrency Exchange

#4 Choose a Good Cryptocurrency Wallet

#5 Keep Your BTC Investments in Compliance

#6 Enjoy Tax-Deferred Earnings

#7 Explore Other Cryptocurrency Investments

<img loading="lazy" class=" wp-image-27449 alignright" src="https://royallegalsolutions.com/wp-content/uploads/2018/03/gold-mining-bitcoin-5.jpeg" alt="gold mining bitcoin - miner with pickaxe" width="331" height="278" />Start Investing Today

How to Invest in Bitcoin Using a Self-Directed IRA

Start Investing Today

Power to Remove a Dangerous Dog

Harboring a Dangerous Dog Can Lead to Liability

Who needs a real estate workout agreement?

A Professional Registered Agent Means You Sleep Easy

Business Entities that Do Require an EIN

What Estate Law Changes Will 2021 Bring?