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Asset Protection Techniques

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By the time people reach their forties, they have usually amassed a few valuable assets like a house. With your growing financial portfolio and assets, it is important that you take steps to protect them. In this depressed economy, every asset you have and every dollar you earn is at risk. Creditors and litigators have become like vultures circling any successful person with unprotected assets. The only way to protect your hard-earned valuables is by setting up an appropriate asset protection plan.

The most important thing you need to keep in mind is that you have to start planning in advance. Only a few things you do after a liability or claim arises can diffuse the situation. In fact, most things you do afterwards could be considered a ‘fraudulent conveyance’, and a court can make you unwind the transaction and give your assets to the creditors. As a general rule, there is nothing you can do once a creditor situation arises.

Therefore, you need to take steps beforehand in order to ensure that creditors don’t have access to your assets.

To protect your assets, you can remove your name from their ownership, but still retain control on them. You want to look poor but be rich. You can do this by transferring your assets into a limited liability company or LLC. A creditor cannot touch the LLC unless you make some distributions from it. They can’t touch any of the assets in the LLC or any assets purchased or sold through it.

Another entity that can protect your assets is an irrevocable trust. Since you don’t technically own any of the assets you transfer into an irrevocable trust, your creditors won’t be able to attach any debt you owe. You can name a child, spouse or friend as the trustee and retain actual control over your assets while losing all legal ownership or control.

Remember that trusts are meant for personal assets, while business assets go into LLCs. LLCs aren’t meant as your personal piggybanks, so don’t use them as such. If you place your personal assets in an LLC, the creditor can pierce the entity on the basis of some theory. You should only place your personal assets in a trust. There is a long and solid law that protects trust assets as long as your trust is properly drafted and funded.

In any type of creditor situation, there are some exemptions granted to you by law. That means the law allows you to keep the assets under these exemptions no matter how much money you owe to your creditors. It is often a good idea to convert some of your ‘not exempt’ assets into assets that are exempt. The most common creditor-exempt entities are life insurance policies, pension plans, IRAs and annuities.

When establishing an asset protection plan, always consult a professional. The specific steps you need to take will differ according to your specific situation. An asset protection attorney is a trained specialist who can put into place a plan that can protect your assets without being deemed fraudulent.
 
Remember that trusts are meant for personal assets, while business assets go into LLCs. LLCs aren’t meant as your personal piggybanks, so don’t use them as such. If you place your personal assets in an LLC, the creditor can pierce the entity on the basis of some theory. You should only place your personal assets in a trust. There is a long and solid law that protects trust assets as long as your trust is properly drafted and funded.
What exactly does that mean, can you please explain it to me?
 
How would one setup the perfect asset protection entity today in 2017? I would like to read about how this can be done now while it seems that everyone is reporting everyone!!:eek: Is there anything that still can be setup and protect assets in form of property, IP rights etc? or is it all gone?
 
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How would one setup the perfect asset protection entity today in 2017? I would like to read about how this can be done now while it seems that everyone is reporting everyone!!:eek: Is there anything that still can be setup and protect assets in form of property, IP rights etc? or is it all gone?
You can anytime setup an offshore holding company if that is what you want. Ask an CPA or tax lawyer to help you to draft a contract and transfer pricing agreement between your current entities and the holding.
 
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How would one setup the perfect asset protection entity today in 2017? I would like to read about how this can be done now while it seems that everyone is reporting everyone!!:eek: Is there anything that still can be setup and protect assets in form of property, IP rights etc? or is it all gone?

John, the rule of assets protection is to own nothing but control everything. For me, I need to classify the assets into two categories. Hard physical assets and cash. I will use a foundation to keep as many things as possible and name a BVI as the beneficiary of the foundation.

As for cash, the problem will arise when we place it into the banking system and none of us can bypass the KYC process. However, if possible, I will keep as much cash as possible in bitcoin. Although it is an open ledger system backed by blockchain, it can provide a better privacy protection than normal banks. The only downside is bitcoin can be quite volatile in terms of pricing. It is not easy to launder money nowadays but it is possible to launder bitcoin and it is possible to get an anonymous bitcoin account to provide further protection. Basically, this will shift the most liquid asset to the underground.
 
As for cash, the problem will arise when we place it into the banking system and none of us can bypass the KYC process. However, if possible, I will keep as much cash as possible in bitcoin. Although it is an open ledger system backed by blockchain, it can provide a better privacy protection than normal banks. The only downside is bitcoin can be quite volatile in terms of pricing. It is not easy to launder money nowadays but it is possible to launder bitcoin and it is possible to get an anonymous bitcoin account to provide further protection. Basically, this will shift the most liquid asset to the underground.
Thank you very much, that was very helpful! I have considered to convert my money into Bitcoins. I have a secret account with euros, my banker told me I have to move the money out of the bank before end of 2017 if I want to avoid to get reported. So I need to find a home for this money!
 
What do you think about this currency is it worth to use or better stay with bitcoins? just curios :)

Auric,

How many of us would think that bitcoin will worth so much in 2017 when it was launched less than 10 years ago? None of us. If we understand bitcoin, we have to understand a few more things. The technology behind it is blockchain and every 10 mins, the world will have 1 more new bitcoin. The rise of blockchain has made it almost impossible to be hacked unless the hackers know the location of all the bitcoin server and hack it simultaneously. There are some people who will do bitcoin mining that this gave birth to a new bitcoin every 10 mins. There is a limitation to the number of bitcoin but it will only reach its limitation after 2140 if I remember the year correctly. By then, the estimated number of bitcoin in circulation will be capped at 21m bitcoin.

In any case, anything that has a limitation will have a value. Same thing like gold, diamonds and antiques the value is high because of scarcity. If there is a new cryptocurrency that has a limitation in quantity, secure enough to be hacked (blockchain) and provide anonymity, it is a good cryptocurrency.

Over the last few weeks, if you look at bitcoin, it is surprisingly sensitive to activities in China instead of US. When China government went after the bitcoin exchanges, the price crashed. Just imagine this, China government is trying to regulate bitcoin but has not looked at other cryptocurrencies. Maybe it is good to buy the laggard cryptocurrencies just like the way we buy shares.
 
There is a whole lot to know about asset protection when you plan to get your funds and property save from creditors and lenders. One of the most simple things to start with is the establishing of a Foundation or Trust in some protected offshore jurisdiction like Cyprus or the Seychelles.
Do you able to simple list the basic we would need to get 90% of assets protected the right way. I'm most scared about lenders to my company!
 
Auric,

How many of us would think that bitcoin will worth so much in 2017 when it was launched less than 10 years ago? None of us. If we understand bitcoin, we have to understand a few more things. The technology behind it is blockchain and every 10 mins, the world will have 1 more new bitcoin. The rise of blockchain has made it almost impossible to be hacked unless the hackers know the location of all the bitcoin server and hack it simultaneously. There are some people who will do bitcoin mining that this gave birth to a new bitcoin every 10 mins. There is a limitation to the number of bitcoin but it will only reach its limitation after 2140 if I remember the year correctly. By then, the estimated number of bitcoin in circulation will be capped at 21m bitcoin.

In any case, anything that has a limitation will have a value. Same thing like gold, diamonds and antiques the value is high because of scarcity. If there is a new cryptocurrency that has a limitation in quantity, secure enough to be hacked (blockchain) and provide anonymity, it is a good cryptocurrency.

Over the last few weeks, if you look at bitcoin, it is surprisingly sensitive to activities in China instead of US. When China government went after the bitcoin exchanges, the price crashed. Just imagine this, China government is trying to regulate bitcoin but has not looked at other cryptocurrencies. Maybe it is good to buy the laggard cryptocurrencies just like the way we buy shares.

Agree, volatility aside Bitcoin is great it is basically a numbered pseudo-anonymous account. Cashing out Bitcoin for cash is not too hard between in-person transactions or the ATMs these days. Purchasing it is even easier.

What do you suggest if someone wanted to do the following (to diversify) with the appropriate offshore structures for ultimate asset protection, assume the budget of the structures is not an issue "best of the best only". No dark docs etc.. Can't put the assets at risk.

1- Bitcoin -> Real world asset, example: Real Estate in a Offshore friendly country? (Caribbean)

2- Bitcoin -> Exchanged into USD/EU and held
 

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