All Forum Posts by: Brian Bradley

@Ron Strand yes I do. The "Bridge Trust" is a combination of a domestic and foreign asset protection trust. It is not for everyone. It makes sense if you have a high risk / visible profession (Medical Doctor, Chiropractor, ect), or an executive with a high income, or small - mid sized business owner, And besides your primary resident you also have other assets and investment properties. Net worth of $2.5 -5 MM + in net worth (minus all liabilities). The price point of $2.5-5 MM is because you now have something you spent a long time building and one large unexpected event can wipe that out, and those with net worths above $5 MM we find already have a system set up. Those with $2.5-5MM either had a close call or know somebody who lost everything and now want to make sure it does not happen to them. The cost for the "bridge trust" is $30k. 

@Steve Emling grit, tenacity and gumption. None of the words I have used to describe myself, but used to describe me by others. But it’s how I’ve gone about my life and career. With a laser focus!

@Catherine Morel in NJ sorry I do not. But I am sure you can find one on this site, as well as google and checking out reviews and asking some people. Good lawyers are affordable, just spend some time asking around and getting referrals. It would be horrible to loose more money for a mistake that could have been reasonably avoided. 

@Ashish Acharya Any appreciating asset that have been properly identified and can be considered legitimate for retirement are reasonable contribute. A very detailed analytic evaluation will go into the calculation to determine this to ensure compliance with CA State Law on reasonable and legitimate for retirement. It's not an evaluation that can be done without running the diagnostics. Their is no limit to funding amount, BUT there must be a "means-testing' analysis done to prove a legitimate need for additional private retirement funding. 

Yes you can manage and self-direct your own assets. While the PRP Trust will require an independent trustee to secure exemption protection benefits, you can still make decisions and oversee your own PRP private asset, business, and investment strategy. 

@Ashish Acharya good question. I think it should be addressed in my other posts where it was broken down more. 

A HUGE advantage for CA residents is the Private Retirement Plan (PRP) codified in law under CCCP 704.115. 

The PRP is not "partial" or ‘maybe’ protection like other plans or LLCs, but TOTAL protection. This is because exemptions are rights and involve no transferring of assets. 

The CA PRP is a State right, not a federal right and so does not depend on federal law for its protection status.

To claim your CA PRP rights you have to:
1. Qualify,
2. Have a formal written and adopted PRP
3. Not overfund the plan according to your current and future earnings,
4. Properly maintain and administer the plan.

The good thing also is the plan is not new. It was codified in CA in 1970 and has plenty of legislative and case law (over 47 years) to show how CA courts respect this right.

How do you set these up? With an experienced attorney familiar with PRPs and a third party administrator. 

Based on the statutes, the legislative history, and the case law, the following 7 essential elements will help guide you when working with your lawyer and third party administrator.

1. Third Party Administrator (TPA) – I use Trust-CFO as my firms third party administrator for my CA clients with PRPs.
2. Qualified diagnosis by the TPA to determine if you even qualify
3. Asset exemption analysis by the TPA to determine which of your assets are eligible for exemption
4. Funding analysis based on income, age, and retirement needs
5. Plan documentation and funding of plan – this is a critical step often overlooked or not done correctly. Your TPA and lawyer will help you with this.
6. Annual administration and review- your TPA will do this review for you.
7. Independent trustee

If you get sued, these elements are what the opposing counsel will be using to argue that your plan did not meet one or more standards. So when evaluating the case law, you will find a few cases where the courts allowed creditors access to the PRP due to NOT following the requirements. SO make sure you follow all requirements or all this is for nothing. 

An interesting fact I read, "If you are living in CA, you are living in a judicial hellhole that ranked #1 by NFIB." If your protection is "limited" as the tile implies with LLC, and CA is horrible state for litigation and taxes, and judges give very little respect to elaborate asset protection schemes to protect debtors (you), so what option do you have? 

I personally would look first towards Federal & State Exemptions and what assets I can exempt, then, after I have maxed out my exemption options with my assets, I would then look at what additional asset protection system I need to set up to protect the rest.

An exemption is a legal right under Federal or State Law to have certain assets unavailable to creditors under any circumstances. This is NOT an asset transfer, therefore cannot be fraudulent or voidable. The interesting thing is, despite how bad of a state CA is for asset protection and taxes, it actually has VERY strong and unique asset protection opportunities via its State Exemptions for Personal Retirement Plans found under California Civil Code 704.115. When you actually compare these exemptions to the other States that are considered the strongest, (TX, NV, FL).

Under CCCP section 704.115 no other state have a unlimited state exemption for private retirement plans such as CA. In fact, the federal retirement law ERISA was modeled after it and has been around and tested in court for many years.

Yes it is hard to believe. Despite having horrible, if not the worst, climate for taxes and litigation, there is actually something CA offers its residents for protection that can convince small, mid-sized business owners and investors to stay in CA and not move out of the state.

By having an experienced lawyer familiar with PRP to properly draft and maintain a CA Private Retirement Plan (PRP) you can protect your assets via exemption. And not the "limited" protection under a charging order. The surprising fact also is that CA is the ONLY state with an exempt private retirement plan (PRP).

The point is, when talking about or considering an asset protection system, the smartest and wealthiest clients 

1. Have insurance, 

2. Pick up all their State and Federal exemption they are entitled to, and 

3. Then set up some asset protection entities they need to cover the rest of the non-exempt assets. It is then a matter of assessing the remaining non exempt assets with protection needs and tax planning. 

But your facts and situation change and your needs change once you max out your exemptions. 

To get into a little of the law of the PRP, Under California state statute (law) CCP 704.115, assets held in a Private Retirement Plan are exempt from creditor lawsuits and bankruptcy judgments, as long as designated specifically for retirement.

No Annual IRS Filings: Yet another advantage of a taking up a PRP is that there is no need for annual Internal Revenue Service filings (IRS).

Contributions are only made after they are taxed which results in a great degree of freedom for the types of funds that can be allocated in addition to very few restrictions on funding amounts. Funds and contributions to your PRP are primarily going to be in the form of private assets that are taxed as they are earned; the only difference between private assets and funds contained in a PRP is that those funds are allocated specifically for use in retirement. Contributions are not tax deductible because the assets being allocated for retirement have already been taxed. Though they are not tax deductible, contributions retain their full character once contributed to your PRT so the inherent tax benefits in each asset are preserved for your benefit during retirement.

Don't let the term 'designated for retirement" turn you off. Since this is not a ERISA governed plan the 59.5 age limitation does not apply. You can designate your own time to retire. Generally we recommend 10 years out. 

If you are a CA resident searching about Asset Protection one option for your, if you qualify,  is the Private Retirement Plan (PRP) which provides one of the highest levels of protection for your assets. PRPs are ideal for small - medium size business owners, or executives with higher salaries and investment properties, or investors using cash flowing properties for both their living expenses and for retirement. 

With our litigious and predatory society there are few purely domestic asset protection planning strategies that offer California residents "true" or "full" Asset Protection. The great thing is that being a California resident, besides good weather, is that you have an additional option to exempt and protect your assets that is not well known but is exclusive for CA Residents; the Private Retirement Plan (PRP).

A PRP is a retirement plan that FULLY EXEMPTS ALL trust assets from any creditor attack, so long as it is reasonable and designated for future use in retirement. In 1970 California instituted its’ state exemption law that assets owned in a private retirement trust are fully exempt under statute. PRPs are specifically designed to enforce your legal exemption right to protect assets from lawsuits and attacks.

ERISA-oriented plans like 401(k)s and RIRAs seek tax deductions for contributions. PRP instead prioritize and protect private assets that already have inherent tax benefits. Instead of seeking sources of income or assets that can be used for tax deductions like IRAs, you can contribute to your PRP as they are earned with little to no restrictions on the amount. Since funds and assets are only allocated to a PRPs after they have been taxed, contributions are not deductible, therefore any private or appreciating asset can be put into a PRP without limits. If you can’t save up enough money for a traditional retirement plan or if you would like to maintain control of your assets and save for retirement on your own terms, a PRP might be for you.

@Catherine Morel why would you want to draft a legally binding contact yourself? Poorly written contracts will not be enforceable, you will not know what clauses to use and specific terms, one of the most common problems is vague language, etc etc. hire a contract lawyer to draft your contracts for you so they are done correct and protect your interest. And DO NOT try to draft a land trust yourself. The problem with DIY legal documents that involve transferring title of land is that even if your situation is very simple, the devil is in the details, and their are many odd things that you would not even think about that can go wrong or need to be dealt with in the trust. The slightest mistake or wrong templet and not adjusting the template correctly can lead you to a very expensive learning lesson and a lot more in attorney fees after the fact. It is cheeper and better business to hire the professionals you need, then to pay more when you are now in a desperate situation looking for legal help to get you out of a self created problem. Not everything in life is a DIY project. Generic forms and templates generally are missing very important clauses and most of the time do not comply with state specific requirements, and your situation and facts will be different then somebody else who might give you a copy of theirs. It's always great to save money, and that is generally a good thing, but trying to penny pinch on legally binding documents is going to be at your own risk. hence the saying "penny wise, pound foolish"