Asset Protection is even more important today with the entitlement attitude that so many people have. Let’s face it, your assets aren’t safe. If you have assets, somebody is eying them to take them away from you. If you have investment real estate, protecting assets from your tenants is critical. If you are a professional, asset protection from your patients and clients is something you have to do. If you are just making good money today, protecting assets from the tax man is a big deal.
Protecting assets today requires you to know about the laws that most attorneys don’t think much about. Most attorneys really don’t worry about protecting assets for you. They are just as happy as a clam to have you “fall into a trap,” because they make the big bucks digging you out of the trap rather than protecting assets for you. It is always more expensive to get out of the mess than it is to avoid the mess. Remember the saying “an ounce of prevention is worth a pound of cure”? It’s true!
Asset protection wasn’t something that mom and dad had to worry about 50 years ago… but protecting assets you have is critical today.
Before you get in trouble, there are tons of things you can do to prevent financial disaster when you do get in trouble. Corporations, LLCs, trusts, equity stripping, and other ownership techniques can be used to beef up your asset protection. Protecting assets after you are in trouble is another story. You can get a free DVD, which is a presentation I give that people pay literally thousands of dollars to attend, that walks you through the tools an attorney can use for protecting assets. The DVD has sold for as much as $149, but it’s yours free now if you simply ask. You can protect your assets, save taxes, avoid probate, literally make more money, and live a lot better life if you learn to use the tools the DVD goes through.
Lawyers make estate planning seem hard. They go to school for an extra three years to learn how to speak and write so you can’t understand them. Once you know the language, estate planning isn’t a mystery. In fact…
Estate planning is easy, if you know what to do.
Most people think that preparing an estate plan involves making a will and setting it in the file cabinet and forgetting about it. Some people get the idea that they are supposed to have a living trust, so they spend the big bucks at the attorney’s office and get a big stack of papers, which they file and forget about. Often these trusts don’t do what is intended. Estate planning is much more than that. While a will and trust enable you to pass your property at your death, a good estate plan will help you make your life more comfortable. You will protect your assets and it will give you more money to spend.
The opening lines in my book, Protecting Your Financial Future, make you the guarantee that doing your estate planning is worth every effort you make and every dime you spend – just in the peace of mind it will give you. The shift in thinking you have to make will open up a new world to you – a world the rich live in.
After you finish your estate planning, you’ll live just like you always have, but something should be different. Your circle of friends may change, or at least the conversations in the circle will change. You will have become a member of an exclusive group of successful people. It doesn’t matter whether you get your trust from the expensive high-rise lawyer’s office or you do it yourself, if you use your estate plan correctly, you will have more success and make more money.
Which type of corporation has the best asset protection value? There are two types of corporations, C corporations and S corporations. The S corporations are usually used by the “little guys,” and the C corporations are always used by the “big guys.” It you are selling stock to a significant number of shareholders, you have to use a C corporation. S corporations are restricted to no more than 100 shareholders who are basically warm blooded American citizens.
To experience success, you have to form a good estate plan and then start using your estate plan correctly.
The asset protection value of a C and an S corporation is identical, because the corporate documents are identical. The requirements for maintenance of the corporations are basically identical. The only difference in the corporations is the election filed with the IRS to have the corporation taxed under Chapter 1, subchapter S or subchapter C, of the IRS Code.
The asset protections of both corporate structures should be identical. There is a perception that C corporations give better asset protection. That is because they are the big boys, and they pay the big bucks to have the attorneys do all of the maintenance to keep the corporate formalities up to snuff. The corporate veil holds when it is challenged. The little guys ignore the corporate formalities, and they lose the corporate shield 95% of the time when it is challenged in court. In the Business Planning portion of the Accumulation and Preservation of Wealth, I hit the corporate formalities hard and teach you how to do them yourself, because unless you’re one of the big boys, you can’t afford to have the attorneys do it for you. You have to do it yourself.