All Forum Posts by: Brian Bradley

@Account Closed talk to an asset protection attorney to help. Purchase the property in your own name, then the day after closing transfer the property out of your personal name into your LLC via a land trust. Property Belongs and is held in the Land Trust and the Land Trust belongs to the LLC.

@Reid Mathews "ordinary and necessary." but if you want to write off more, then change our facts so that you can. read Tom Wheelright's book on Tax free wealth. He is Robert Kiyosaki's CPA. BP also has a good book for REIs and taxes.

Find a good investment CPA and lawyer. It's about Utilizing tax planning concepts and changing your facts to make the tax code treasure map work for you. This applies to estate planning and asset protection planning as well as investing. If you are investing and trying to move from the left side of the quadrant as an employee or self employed to the right by being a home provider (investor), then year long tax planning should be a regular event for you. This will help accomplish your goal. 

Taxes will either make you rich or kill your cash flow. The proper use of tax planning and asset protection with trusts and LLCs with proper designated elections is the nuts snd bolts. It’s creating a system and then letting it grow. About taking advantage of the intended benefits of the tax code. If you do not utilize these incentives then you really are just cheating yourself.

If you want to reach your full capacity as an investor, you need to listen and follow the IRS tax code treasure map, start using the incentives they provide for investors, and then changing your facts so that you can substantially legally lower your taxes.

Taxes are our biggest expense. Do not over look them when analyzing your deal and planning your wealth and asset protection strategy.

@Marc Gleason I am an asset protection attorney. it depends on your overall goal and investment. I recommend starting asset protection companies in the strongest states for protection of member owners and that has the best judgment order laws. Like any business, you can incorporate anywhere. You will most likely over time add assets all over as you find deals, and markets and deals shift. (DE, WY, NV, TX) are the main 4. AZ is coming along. DE is more name value now and nostalgia. NV and TX are very strong asset protection states with protection for the LLC or Series LLC member owners as well as strong charging order laws.

@Tina Jenkins I am an asset protection attorney specifically for real estate investors. You will want to talk to an attorney over the phone to go over your personal situation, your state, your current assets, liabilities, if you are under attack or not, what your short and long term goals are, where you are investing and possibly if you will be investing out of your current state. 

The name of the game for asset protection is to get the properties you own in you personal name out of your personal name, and into your LLC or Series LLC and preferably connected via a land trust. This is different then an estate plan trust. This is specifically for asset protection.

Their are lots of ways to skin the cat with asset protection. Their is no 'one best way.' Every person is different. Its not about what you make but what you keep, and not owning anything but benefiting from everything. 

 I also see some misconceptions on what asset protection is and its purpose. Some view asset protection planning with a skeptical eye. They believe there is a moral obligation to pay one’s debts. They think that asset protection planning is immoral because it prevents a creditor from collecting on a judgment entered by a court.  The U.S. justice system is unpredictable. Defendants are faced with ever-expanding theories of liability, being sued just because they appear to have “deep pockets,” and judgments entered against them based on desired outcomes instead of the law.

Attorneys may ethically and legally help clients protect their assets from future creditors, predators, and lawsuits. Asset protection planning is a legitimate form of wealth planning. Attorneys who engage in asset protection planning help their clients preserve and protect their property in advance of a claim or the threat of a claim. Again it’s about setting up the system in advance, before, a threat. Nothing wrong or fraudulent about that. 

The idea is to attack the incentive and damages and make it not worth the time to get to you and through the system. To provide an incentive for settling a claim, improve the client’s bargaining position, offer options when a claim is asserted, and, ultimately, deter litigation. On the other hand, asset protection planning is not about avoiding taxes, keeping secrets, hiding, or fraud.

Asset Protection really comes down to making it as difficult as humanly possible to tie the assets to you. 

Asset Protection is built around the business concepts of insurance and law firms. The insurance industry is a business built around making a profit. Insurance is great, and I strongly say get it and as much coverage as you can get, but if a large claim does come due to negligence etc, You will most likely be suing your insurance provider while being sued yourself. Not a good situation. The next is that the litigation industry is also built around making money - as well as upholding the law. If a firm has to decide between pursuing you or another case, and you have a very time consuming and expensive protection system they have to try to get through, they will most likely take the other case. Both industries look for the path of least resistance toward making their financial goals. To survive they must make profit. 

@Navid A. the only thing I would add in relation to the Series LLC specifically is to really know your states LLC Internal Liability Shields and judgment orders, and then how those relate to the individual child series of the Series LLC. Since the Series LLC is an LLC, its first going to be attacked by piercing the veil like a standard LLC. The next issue will be if a judgment is entered against you, what will happen with the bleeding? Will it stretch into the other child series or not? NC does not yet have a Series LLC so if investing in just NC you need to know this relation to the protection of each child series and be ok with it. The uncertainty is with the States that do not have a Statutory Series LLC and if those states will uphold the child series protection if a judgment is entered. No cases have made it this far into the lawsuit and either do not get filed, or settled very fast due to the cost to get through the protection system. If you are going to or considering investing in a state that does not have or recognize a Series LLC, it is something to think about when making your decision. I still really like the Series LLC, and the have been in existence for a long time, since the existence of the traditional LLC. If a poison pill existed to kill it, we would know about it by now and it would be all over. The fact that no such poison pill exists is the point and power of the Series LLC for any state as investors all over the nation use them. 

The only uncertainty that people talk about and the point they are getting to is regarding what happens if a judgment is entered in a state that does not recognize the Series protection structure, and or an activist judge does not uphold the Series LLC structure? You unfortunately cannot control the unknown of activist judges that do not follow the law. The only true protection from that is to go foreign with a Cook Island Trust. 

@Trevor Finton the one thing I did not add  in relation to the Series LLC is to really know your states LLC Internal Liability Shields and judgment orders, and then how those relate to the individual child series of the Series LLC. Since the Series LLC is an LLC, its first going to be attacked by piercing the veil like a standard LLC. The next issue will be if a judgment is entered against you, what will happen with the bleeding? Will it stretch into the other child series or not? MI does not have or recognize a Series LLC so if investing in just MI you should know this and be comfortable with this aspect of the Series LLC as it relates to being in MI and investing in MI. The uncertainty is with the States that do not have a Statutory Series LLC and if those states will uphold the child series. No cases have made it that far into the lawsuit and either do not get filed, or settled very fast due to the cost to get through the protection system. If you are going to or considering investing in a state that does not have or recognize a Series LLC, it is something to think about when making your decision. I still like the Series LLC for investors in any State. As an investor, you never know where the deals will be and will often start expanding as you find better deals in other locations. 

@Todd Blyton the only thing I would add in relation to the Series LLC is to really know your states LLC Internal Liability Shields and judgment orders, and then how those relate to the individual child series of the Series LLC. Since the Series LLC is an LLC, its first going to be attacked by piercing the veil like a standard LLC. The next issue will be if a judgment is entered against you, what will happen with the bleeding? Will it stretch into the other child series or not? Wisconsin does have a Series LLC so if investing in just Wisconsin you should be fine in relation to the protection of each child series. The uncertainty is with the States that do not have a Statutory Series LLC and if those states will uphold the child series. No cases have made it this far into the lawsuit and either do not get filed, or settled very fast due to the cost to get through the protection system. If you are going to or considering investing in a state that does not have or recognize a Series LLC, it is something to think about when making your decision.

@Todd Blyton You can set up an LLC or Series LLC in any state as both @Scott Smith and @Ryan Seib stated. Both went into a lot of detail so I am not going to rewrite what they have all said. So this post will be shorter then what most have come to expect from me. When looking to set up a company for asset protection pick the states that have strong independent liability shields and charging order laws. Think of States like TX, NV, DE. Then look at the start up costs and maintenance costs from their. You will probably be investing all over as you grow, not just in one state. Pick the strongest state internal liability shield that you can, and the state with the best charging order laws. I like TX and NV. When setting up your Series LLC think about connecting it with a Land Trust. You transfer the property out of your name through the land trust that is connected to the child Series of the Parent Series LLC. Talk to your CPA and Attorney. 

@Trevor Finton I used to live in St. Joseph. Went up to Grand Rapids a lot. You will need a good Real Estate investing CPA and Asset Protection Attorney. Insurance is great and that is the first step in protection, but its a business. They are good at covering small claims, but if a true negligent or 'fraudulent' accident happened, they will challenge the claim and then yo will be stuck defending yourself in a lawsuit while at the same time sing your insurance provider. I now this because I am a high stake litigation attorney and have been on both sides of this the plaintiff side and the defense side. insurance is a business. Just like law is a a business. @Scott Smith hit on some good points. Integrity does not protect you. Nice guys and girls get sued. The more you have the larger target you are and the more you have to prey upon, and the bigger chance of accidents and negligence etc. It never the planed that gets you, but unplanned negligence. Scott as a big high stake insurance litigator also and so knows the fraud defense game very well. 

If you plan on growing your portfolio get the team in place, CPA, Lawyer and Investment Agents, a few lenders. Then get insurance, and set up a Series LLC with a land trust so that you can separate our your properties into individual series or children, and then by using the land trust you can legally transfer the properties our of your own personal name into the land trust that is connected to the Series LLC without the bank or lender getting upset. It might take a min phone call with them from your attorney or you explaining what you have set up. But now your properties are out of your personal name. Get the loans in your own personal name so that you get better rates, then the day after you close, have your attorney transfer them out of your own personal name. It is the combination of the Land Trust and the Series LLC. Then if you want another degree of separation, you can then create a side traditional operating company that owns no assets but does all your contracting for you. This is the basic set up that we use for new investors that is scalable and streamlined. Firms out their offer this set up as very manageable costs and in bundles for the newbie.

@Navid A. The LLC can be a property holding company. When setting it up talk to both your lawyer and CPA. You will need to swing one way or the other in what you want. Do you want to set up the LLC for asset protection and limiting personal liability, or for tax deductions and for tax purposes. The difference will be in how the Operation Documents and Articles of Incorporation are drafted. Like @Scott Smith said, LLCs and Series LLCs are great for asset holding companies, and the Series LLC for placing each asset into its own personal child series. If you want to go more tax advantages and S-Corps are great for limiting self - employment taxes etc like @Mike S. said. When creating an Asset Protection system it is going to be created tax neutral, yet will have tax benefits, but that is not the purpose of an asset protection system. But asset protection lawyer will work with your CPA or their network of CPAs to help on the tax side. Try to think short and long run. If plan on growing properties etc you will increase your exposure and risk. Get Insurance, possibly an umbrella policy also, then talk to your asset protection lawyer like myself or scott or some of the other ones that are active on this site about your options on the Series LLC or LLC option and your CPA. Its a team effort. DO NOT DO THIS YOURSELF> like @Anthony Wick said talk to your CPA who specializes in real estate investing for taxes and your lawyer for the legal side.