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Asset Protection 101: How to Create a Veil of Privacy Around Your Assets

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If you’re like most people, you probably don’t give much thought to asset protection. After all, why would you? It’s not something that comes up in everyday conversation, and it’s not something that most of us have to worry about on a regular basis. But the truth is, asset protection is important for everyone – whether you have a lot of assets or just a few.

Asset protection is simply the process of creating a barrier between your assets and potential creditors. It’s a way of ensuring that your assets are protected in the event that you are sued or become financially insolvent. There are many different ways to go about asset protection, but the most important thing is to make sure that you have a plan in place.

There are a few things to keep in mind when creating an asset protection plan. First, you need to consider which assets you want to protect. Not all assets are created equal, and some may be more important to you than others. For example, your home is likely one of your most valuable assets, so you’ll want to make sure that it’s protected.

Other significant assets include:

  • Private businesses
  • Real estate investments
  • Stock and bond portfolios
  • Cryptocurrency holdings
  • Private debt portfolios
  • High value vehicles
  • Royalties
  • Patents and trademarks
  • Retirement accounts

Second, you need to consider how to best protect your assets. There are a variety of asset protection strategies available, and the best one for you will depend on your specific situation. For example, if you’re concerned about creditors coming after your home, you might consider putting it in a trust or a Wyoming LLC.

Third, you need to think about the potential risks that you face. Not everyone faces the same risks, so it’s important to tailor your asset protection plan to your specific needs. For example, if you’re self-employed, you might be at greater risk for lawsuits than someone who works for a company.

Asset protection is a complex topic, and there’s no one-size-fits-all solution. However, if you take the time to create a plan that fits your specific needs, you can rest assured knowing that your assets are well-protected.

Understand the types of privacy and asset protection laws that are available to you

Most people are familiar with the concept of asset protection, but they may not be aware of the different types of laws that can be used to protect their assets. Here are a few of the most common types of asset protection laws:

1. Offshore Asset Protection:

Offshore asset protection refers to the practice of holding assets in a jurisdiction outside of your home country. This can be a useful strategy for protecting assets from creditors, as it can be difficult for them to pursue assets that are held in another country. Holding real estate in your own name, foreign bank accounts or physical precious metals are good examples.

2. Domestic Asset Protection:

Domestic asset protection refers to the use of state laws to protect assets from creditors. Each state has its own set of asset protection laws, so it’s important to research the laws in your state to see what options are available to you. One example here is homestead laws that protect some or all of the equity in your primary residence.

3. Self-Settled Trusts:

A self-settled trust is a trust that is created for the benefit of the person who creates it. The assets in the trust are protected from creditors, but the person who created the trust can still access the assets if necessary. This type of trust is often used in estate planning.

4. Spendthrift Trusts:

A spendthrift trust is a trust that is designed to prevent the beneficiary from squandering the assets. The trustee has discretion over how the assets are used, and the beneficiary cannot access the assets directly. This type of trust is often used for children or other family members who are not financially responsible.

5. Domestic Limited Liability Companies:

A domestic limited liability company (LLC) is a company that is formed under the laws of a particular state. LLCs offer asset protection and limited liability to their members, meaning that the members’ personal assets are protected from creditors.

We recommend Wyoming LLC’s and New Mexico LLC’s for this purpose. A Wyoming LLC is an excellent asset protection tool since members and manager are not required to be disclosed to the Secretary of State. Additionally, Wyoming has excellent asset protection statutes protecting the assets of single member LLC’s the same like multi-member LLC’s.

New Mexico LLC’s are excellent for privacy since there is no disclosure of the members or managers to the Secretary of State and the registered agent does not even need to know who they are either. Since there is no annual report filing for New Mexico LLC’s, then there is no information provide to the state.

6. Foreign Limited Liability Companies:

A foreign limited liability company (LLC) is a company that is formed under the laws of a foreign country. LLCs offer asset protection and limited liability to their members, meaning that the members’ personal assets are protected from creditors. We recommend Anguilla LLC’s for anyone interested in a foreign limited liability company.

7. International Business Companies:

An international business company (IBC) is a company that is formed under the laws of a foreign country. IBCs offer asset protection and limited liability to their shareholders, meaning that the shareholders’ personal assets are protected from creditors. We recommend Anguilla IBC’s for anyone interested in an international business company.

8. Foundations:

A foundation is a legal entity that is created for the purpose of holding assets and distributing them to beneficiaries. Foundations offer asset protection and tax advantages, making them an attractive option for those looking to protect their assets. We recommend Anguilla foundations for anyone interested in this type of asset protection structure.

9. Charitable Trusts:

A charitable trust is a trust that is created for the purpose of benefiting a charity. The assets in the trust are protected from creditors, and the trustee has discretion over how the assets are used. We recommend Anguilla charitable trusts for anyone interested in this type of asset protection structure.

10. Offshore Trusts:

An offshore trust is a trust that is created in a foreign country. The assets in the trust are protected from creditors, and the trustee has discretion over how the assets are used. With an offshore asset protection trust, you can combine the best parts of self-settled trusts and spendthrift trusts to give you rock solid asset protection against any would-be creditors. We recommend Anguilla offshore trusts for anyone interested in this type of asset protection structure.

Each of these asset protection strategies has its own advantages and disadvantages, so it’s important to consult with an asset protection professional to determine which one is right for you.

About Author

Rick Mak

Rick Mak

Rick Mak is a 30-year veteran businessman, having started, bought, and/or sold more than a dozen companies. He has bachelor's degrees in International Business, Finance, and Economics, with masters in both Entrepreneurship and International Law. He has spoken at hundreds of conferences around the world during his career on entrepreneurship, international tax law, asset protection, and company structure. Business Anywhere Editorial Guidelines

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