*I am not a CPA/Attorney. This not legal advice but after 1000’s of calls here is what I see the majority of

If you are doing wrong doing or negligent please do not read on.

The best asset protection is being broke 😁 Suing someone with no assets (under $250k net worth) is the best asset way to deter a lawsuit.



Litigation from your investments – someone falls at your rental

Litigation from outside your investments – you are driving and hit grandma



Irrevocable Trusts

Nelson Rockafeller said “Own nothing, Control everything”

Solution… have a trust where you Control and do not Own.

Once you set this trust on its way you separate yourself from the assets put into there

Spendthrift provisions – put limits on how your beneficiaries and limit creditors (threats) ability to get at assets


Charging order protection

A charging order is access to assets in an entity which can be granted by a court to a creditor or litigating party. This can be a nightmare if you are looking to make future investments or get loans as it ties you up.

Some entities can grant you protection from a charging order by excluding


Fraudulent conveyance

Any way to hinder or defraud a creditor can be considered a fraudulent conveyance.

An example of a fraudulent conveyance is to put assets into a trust or LLC after the fact. Therefore you have to create your entity structure now and not when you are under assault.



Where you fight over the terms of a dispute and under what set of laws (US or specific state)

LLCs/Trusts mean different things in different jurisdictions

Think of it like home court advantage


Going off-shore

Cook islands is a common off-shore jurisdiction where is very favorable to protecting trust. You need to get a lawyer that can practice in the Cook Islands, they need to pay court expenses, and statute of limitations is very short. However there are a lot of scams out there plus you need to actually maintain a bank account off shore which can be a bit impractical. Plus it can cost over $30K-50K to setup. Most people are paranoid about this stuff and opt for an overkill entity structure which makes sense emotionally when you work so hard to build your assets over $1M.


The Domestic Trust

Many states are allowing trusts without the risks, costs, and headaches of an offshore entity.


Frivolous lawsuits

Most lawsuits are completely bogus but are files to extort you of your money. Most lawsuits end in settlements. Don’t be the obvious target who does not have their entity together. Ultra wealthy $5+ million net worth have the resources and often have their entity set so they are poor targets. Ideal targets are 1-5M net worth people because they are often too busy for asset protection planning and have something to sue for.


Other exotic structures

If you anticipate a un-filed lawsuit you might be able to go offshore in a short amount of time (under 30 days) to force a better settlement. Think of a turtle going into their shell.

Overseas International Trusts for Asset Protection


Action Items

Have insurance and umbrella insurance if you are not completely broke (over $250K net worth)

Then create appropriate LLC structures to firewall your assets because we are in a messed up country where the law and courts don’t always see eye to eye.

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Other Terms

For full glossary go here

Trust – an arrangement where one party entrusts another party the right to hold title to property or assets for the benefit of a third party. NOTE: trusts must pay taxes.

Grantor – The party who created the trust.

Trustee – The party who is given the right to hold title to the property or assets

Beneficiary – The individual(s) who will receive the property/assets.

Grantor Trust – Creator of trust (the Grantor) is responsible for the taxes on the trust. 

Non-grantor Trust – Either the assets in the trust will be taxed or the beneficiary pays the taxes.

Revocable Trust – You can change your mind, you can write “Revoked” on the front page of the trust and it no longer exists.

Irrevocable Trust – You can’t revoke the trust, it is a non-grantor trust set-up for somebody else. 

Simple Trust – Must annually distribute to the beneficiaries any income it earns on trust assets, the trust can’t distribute the principal of the trust, and the trust can’t make distributions to charitable organizations. 

Complex Trust – Contains provisions for charitable gifts, an income stream, or concerns other types of wealth distribution.

Freeze Trust – Freezing the value of your estate and giving it to your beneficiaries. You are the grantor in the irrevocable trust. Used for minimizing taxes and preventing surviving children from taking a large tax burden. 

Spendthrift Trust – Provisions in the trust that limits how the trustee can use the assets. 

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