The idea was not to talk to attorneys who set up special asset protections, but to go to those who have litigated against them and unraveled these pre-packaged structures that seldom deliver what they sell as “personalized” structures.
We learned that the following does not stand a chance:
- Anonymous C Corporation entities do not work well because most judges demand the identity of the shareholders within 48 hours or they repossess the assets of these corporations.
- Offshore structures do not work well because judges can easily demand to repatriate assets or they throw the proverbial book at the defendant who could be convicted of contempt of court.
- Land Trusts or other trusts do not work well because the judges more often than not demand the trust documents that reveal who the Grantor and Beneficiaries are so they can unravel the structure. Moreover, if the trust is irrevocable, you are at the mercy of a third party administrator, usually an attorney, who will cost you more and will be in charge of your money.
- Friendly liens and credit lines that strip equity of assets must have legal reasons and economic substance for the courts or they run the risk of being dismantled. Plus a lien through a bank or other lender does not strip more than 70 or 80% of the equity you have in any of your assets.
- Separate LLCs for separate assets do not mean much because you still have the equity in each LLC exposed and at risk, plus you have to maintain several entities at a greater cost and expense.
- Insurance coverage is vital but it cannot solve all your problems due to exclusions, coverage limitations per claim, and number of claims that could be filed against each policy. Moreover insurance coverage cannot help you much in legal cases where the plaintiff’s attorney sues for punitive damages (to teach the defendant a lesson in the millions of dollars).
Through the brainstorming efforts of the top attorneys and some retired judges, we were able to formulate and finalize the ULTIMATE ASSET PROTECTION STRUCTURE that addresses all the points above and has precedent in US Federal and local courts.
How Come I've Never Heard of this Structure?
Sadly, because many of the most desirable features that people want in an Asset Protection Structure are in conflict with what attorneys and big asset protection law firms want to offer:
“Inexpensive to set up”…”easy to use”….”Inexpensive to maintain“ etc..
The reality is: Attorneys can’t make money with inexpensive and simple structures. They want to know your net worth and the value of the assets you are holding so they can bill you accordingly.
Are You an Attorney’s Firm?
CMREI is a training and education company and we have been in business since 1999. Through the years, many of our investors, business owners and licensed professionals shared their success and failure stories and we concluded that while many can accumulate wealth and even reduce taxes, if everyone does not protect the assets accumulated, all their work could be unraveled in no time.
Lawsuits have caused more health problems, divorce cases, business bankruptcies and investment disasters than all other threats combined.
We decided to retain the best attorneys to work with us and for us to put the pieces together to present what stands in court today as the ULTIMATE ASSET PROTECTION STRUCTURE to assist our members in the next 15 years and beyond.
In a Nutshell: The End Goal is Simplicity so Let’s Begin with Simplicity.
Your three lines of defense are:
• Act prudently (what you do, whom you do it with, and how it gets done)
•Get insurance and then umbrella insurance (including Errors and Omissions)
•Eliminate any equity in all your assets (All to only ONE entity, an LLC in WY)
Almost anyone with any asset needs the ULTIMATE ASSET PROTECTION STRUCTURE because it is the most powerful yet the simplest and least expensive set up. It has not been challenged in court because it has the proper legal precedent and economic substance to offer the three most important elements everyone needs:
• A Lawsuit Deterrent
• An Asset Protection
• An Asset Preservation
Here is a Summary of How it Works:
• Figure out how much equity you have in each of your properties and businesses. (Calculate the equity on the higher side)
• Set up an LLC in Wyoming
(Our attorneys draft a specially worded Asset Protection Operating Agreement based on your specific asset values and locations)
• Show a debt obligation to the LLC against each of your assets
(Our attorneys structure the debt through properly worded Promissory Notes and recorded Liens for each state where each of your Assets is located – All with legal reasons and proper economic substance to stand in any court)
• No plaintiff’s attorney will want to go after an asset that has no equity, as there is nothing to collect.
(If the litigants still pursue a claim and end up winning and getting a charging order, it may trigger a tax invoice for phantom income on a judgment against which they have not collected a penny)
• This discourages people from the get-go to pursue a lawsuit, and if they insist your assets are protected and preserved under the law because all has been structured prior to the lawsuit not as loans with the LLC but as capitalization of the LLC
• You do not need anonymity or transferring of assets etc. as the WY LLC protects you under this structure and it is tax neutral as the LLC flows back to you as per IRS code.