All Forum Posts by: Brian Bradley

@Account Closed welcome to BP. 

I like the podcast. I was actually honored enough to be featured on the WCI Ep 132. We got into a lot of great topics way beyond medical malpractice. My wife works in the medical field, and so do most of my friends. They turned me onto the podcast. I like the focus of Dr. Jim on helping doctors stop doing stupid things with their money and invest intelligently. 

Beyond diversification, If you want to "winterize" your retirement, one thing to look at is asset protection. Diversification is great to spread out investment risk and loss, but won't do anything to protect that diversified portfolio. So as you diversify, also be proactive and protect it. And if you are a CA resident, one method I really like that you can take advantage of as a CA resident is a private retirement plan trust. If your primary purpose / intent is to protect these assets "for your retirement," then the PRT® could be for you. You can protect much of the wealth you have worked so hard to build so that it will be there for you in retirement. Under California State Statute CCP 704.115, a PRT® exempts all retirement assets from creditors, including bankruptcies and lawsuits. What happens in recessions is substantially more lawsuits and shark looking for deep pockets. Cash, stocks, business profits, savings, bonds, gold, real estate, notes, even corporate stock and private business interests can all be placed safely into your PRT® for your retirement planning, and receive the secondary exemption protection. PRT® has no funding limit as long as the assets meet the retirement requirements, and no age limit for deductions, so no 59.5 age. I think you have to both diversify and protect. 

@Rob K. you might like this article written by the Journal of Accountancy on 199a safe harbors and Real Estate. https://www.journalofaccountancy.com/news/2019/sep/rental-real-estate-safe-harbor-qbi-deduction-201922135.html

WealthPRIME is a very good tax mitigation company who also specialize in 199a's. I would suggest reaching our to them for expert opinions. 

@Duke Giordano I saw your IM, i will reply to that. 

To follow up on a prior post, Its' pretty awesome. I am very thankful to have been invited to talk. I was recently featured on Financial Gravity Episode 131 and talked with TAX MASTER and owner of publicly traded financial management company Financial Gravity - John Pollock on High End Asset Protection and tax mitigation strategies. As well as, The Business Credit & Finance Show Episode 318. We got to break down a lot about asset protection, tax mitigation, finances and proactive planning. They were very fun and informative shows. It's always great when you get to talk with other experts and see how they think and what they look at, what they are doing with clients and why. One of the shared take aways from both was that if you don't take action on what you learn, then you really are not doing anything. As you read or learn something, apply it into your life. If asset protection and preservation is important to you, then you need to be preventative and take action before you need it. It was a fun chat with both John and Ty. 

@Jim Goebel no full proof bullet proof system exists. the issue you will always have with anything with LLCs is that they are just limited. they say it the name. They act more as a deterrent. And then if they are pierced they will then have zero protection. They are good places to start. Lawsuits will always be through the State laws where you are sued. For example that states Tort Personal Injury laws. If you go the LLC option, you will just have to be comfortable with both its strengths and weaknesses. Yes it will get the property out of your personal name, act as a deterrent, and get your to the negotiating table possibly faster to settle the claim. But, they are only 'maybe' protection at the end of the day. Asset Protection Trusts are the next level up to consider, and then if you have a higher net worth, or protection is a very big deal for you and your profession and risk exposure then Offshore AP Trusts. At the end of the day, the idea is to not got to court or get to court, and settle the claims very fast. Nobody want to have to pay the costs of legal fees and appeals etc. Its always in both parties best interest to settle. If you have a strong Asset Protection Plan in place, that is what it will do for you.

@Nicholas Moran if you are concerned about asset protection and just starting out, an LLC is a good entry point. At the end of the day you want the asset our of your personal name. If you have a mortgage on the property then Consider an LLC with a land trust. If going the LLC route, I would generally say think of using two. One as an asset holding company w/ the Land Trust, and a second as the operating company. If you are a higher net worth person or have your own business etc then you might want to consider other types of asset protection. You're entire level of risk and liabilities determines the tool to use. But for just one property, LLCs are a good starting point to talk to your lawyer about. Sorry for the delay. I have not been on BP for a little. I have been busy with litigation and forming some new affiliations with great firms and been spending a lot of time talking on various Investment and Finance Podcasts.

Feel free to email for references.

At the core of what I see any client wants when shopping for an asset protection system is a system that is effective, that gives them control, the cost are reasonable, and so is the annual maintenance.

Effectiveness for any asset protection systems means that the system must work and not invite an attorney to test it thinking they will get a payday. The best place to start when looking to protect yourself and your assets is with exemption planning. 

Exemption planning should be step one. And the reason you want to start with exemption planning is because an exemption is a right that you have under the Law. It’s automatically protected.

Now exemptions will very State by State so you are going to have to go and talk to your own lawyer to see what those are in your State.

I want to talk about one specific exemption that is available for California residents. Partly because California is a heavily populated state, with lots of investors, and is known for being a very non-asset protection friendly state.

For you California residents, the great thing is that you live in a great state that surprisingly is the only State to grant FULL exemption protection for any asset that qualifies for being placed in a Private Retirement Plan, or (PRP) Plan, that was codified under CA Code section 704.115 back in the 70s.

The great thing about using and starting with exemption planning is that once that asset is qualified as exempt, nothing crazy or elaborate needs to be done to protect it. Its exempt. And PRP plans are tax neutral, you can invest your assets in anything you want.

And for those investors who need to live off the cash flow, you can make a PRP Plan that creates distributions to meet that lifestyle. This is partly because these plans are not limited like ERISA or government regulated retirement plans. PRP Plans were actually created before Government Retirement Plans. It is a State regulated plan. What this means is that there is no 59.5 age limit for distributions. You set your own retirement age based of statistical metrics and analytics for funding the Plan. It is these actuarial statistical funding analysis that the courts require under In re Rucker, In re Crosby & Tarsada Hotel.

The other beautiful thing about PRP Exemption planning is that you can actually protect the future value of the assets. What this means is that you are protecting the real estate values that have not been earned yet. So what you are doing is taking an actuarially calculation, and it is these statistical calculations that prove the future funding need, and then you add that future amount into the plan.

A few good examples of an exemption are FL & TX homestead exemptions. For example in FL your home regardless of its value is absolutely protected from creditors so long as it is contained within 1/4th an acre. This is what an exemption is. An absolute legal right. Period. This is how OJ Simpson kept his FL mansion after a wrongful death claim was awarded against him. He lost everything, even his Heisman trophy, except his NFL Pension since it was Federally exempt, and his FL mansion since it was a State Exemption.

When you are looking at your options for a protection system, and you live in California, remember that you have the goose that lays the golden egg option with CCP 704.115. And it has been in existence for over 40 years, with over 40 years of supporting case law. Not many protection systems can say that.

When talking to a California Asset Protection firm, make sure to bring of this option, and compare it with the other options (LLC, DST, DAPT, PRP, etc) that are presented. Then match what you need with what you qualify for and your budget. Not everybody will qualify for a PRP Plan. The courts have need based funding metrics you must meet. But it is a great option to know about.

Some prior case history of PRP Plans for you due diligence. 

Tarsadia Hotel (2015)

In re Rucker (9th Cir 2009)

In re Crosby

In re Metz (9th Cir. 1998).

Dudley, 249 F.3d at 1176

In re Bloom, 839 F. 2d at 1379

In re Cutter (9th Cir 1999)

In re Moses (9th Cir 1999)