asset protection (k.i.s.s.) “a fool and his money are always welcome” by rick kahler, ccim,...
Post on 19-Dec-2015
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Asset Protection(K.I.S.S.)
“A Fool And His Money Are Always Welcome”
By Rick Kahler, CCIM, CFP™, GAA
Kahler Financial Group
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“Who Me, Worry?I’ve Got Insurance.”
• Denied Claims
• Policy Limits
• Bankruptcy
• Lapsed Policy
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“Well, Maybe I Should Worry.”
• Frivolous Law Suits – “Show me the assets”
• High Profile = Perceived Deep Pockets
• Property Liability– EPA, HUD
• Property seizures – 260,000 per year– RICO, DEA, ATF, FBI, IRS
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“OK, I’ll Worry!”
• Illegal discrimination• Returning deposits• Illegal contracts• Lead paint• Injury to tenant• Pools• Smoke detectors• Failure to maintain
• Injured visitors• Inadequate door locks• Drug dealers• Liability for manager• Failure to remove trash• Violations of laws• Damage by workmen• Etc.
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“OK, OK…What Should I Do?
Get started, today.
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Before You Start
• Good asset protection seems real silly, like major overkill….until you need it.
• Then it’s called a fraudulent transfer.
• Get used to hearing, “Why would you want to do that?” and “You can’t do that."
• Educate yourself
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Asset Protection Fundamentals
• Own nothing in your own name
• Use a variety of entities
–Trusts, LLCs, Corps, FLPs
• In a variety of states
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K.I.S.S.
Keeping It Simple isn’t Smart
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How Do I Protect My Real Estate?
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Methods To Hold Real Property
• Personal Name
• Living Trust
• Corporation
• Limited Liability Company
• Limited Liability Partnership
• Land Trust
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Personal Name
• NO liability protection
• NO privacy
• Report taxes on Schedule E
• NO annual fees or paperwork
• NO annual meeting
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Living Trust
• NO liability protection
• Some Privacy– Don’t use your name in the title or be trustee– Beneficiary deemed to own equitable title
• NO additional tax return
• NO annual fees or paperwork
• Tax Neutral
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Corporation
• Liability protection– Can only lose what corporation owns
• Some privacy– Officers are public record
• Additional tax return• Annual fees and meeting• Not tax neutral
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Limited Liability Company
• Liability protection– Can only lose what company owns
• Some privacy– Officers are public record
• Additional tax return
• Annual fees but no meeting
• Tax neutral
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Limited Liability Partnership
• Liability protection– Can only lose what partnership owns
• Some privacy– Two partners are public record
• Additional tax return
• Annual fees but no meeting
• Tax neutral
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States That Statutorily Recognize Land Trusts
• Florida
• Georgia
• Hawaii
• Illinois
• North Dakota
• Virginia
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Land Trust
• Liability protection– Can only lose what land trust owns
• Privacy– Trust not public record
– Beneficiary deemed to own personal property
• NO additional tax return• NO annual fees • NO annual meeting• Tax neutral
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LAND TRUST
Real Estate
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LAND TRUST North Dakota
Real EstateRapid City
TrusteeNorth Dakota Resident
Beneficiary
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LT ND
RERC
TrusteeNorth Dakota Resident
Beneficiary
LLC Wyoming
Registered AgentWyoming Resident
LT ND
LT ND
RERC
RERC
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LAND TRUST North Dakota
Real EstateRapid City
TrusteeNorth Dakota Resident
Beneficiary
LLC Wyoming
Registered AgentWyoming Resident
LIVING TRUST South Dakota
TrusteeYou
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This Is Just The Beginning
• Don’t try this at home
• The devil is in the details
• Educate yourself
• Educate your attorney
• Educate your accountant
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Our 30 Years of Experience Runs Deep
• Operate multiple businesses
• With over 40 employees
• Instruct nationally and internationally
• Columnist for 10 years
• Several financial and real estate degrees– CFP™, ChFC, CCIM, GAA– Masters in Wealth Management
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Our Broad Experience Means:
• We give you tried applications, not theory
• You learn from our experiences
• We see the bigger picture
• We know the answers to the questions you don’t ask
• You get better, more balanced advice.