Asset Protection
(K.I.S.S.)
“A Fool And His Money Are Always
Welcome”
By Rick Kahler, CCIM, CFP™, GAA
Kahler Financial Group
“Who Me, Worry?
I’ve Got Insurance.”
• Denied Claims
• Policy Limits
• Bankruptcy
• Lapsed Policy
“Well, Maybe I Should Worry.”
• Frivolous Law Suits – “Show me the assets”
• High Profile = Perceived Deep Pockets
• Property Liability
– EPA, HUD
• Property seizures – 260,000 per year
– RICO, DEA, ATF, FBI, IRS
“OK, I’ll Worry!”
• Illegal discrimination • Injured visitors
• Returning deposits • Inadequate door locks
• Illegal contracts • Drug dealers
• Lead paint • Liability for manager
• Injury to tenant • Failure to remove trash
• Pools • Violations of laws
• Smoke detectors • Damage by workmen
• Failure to maintain • Etc.
“OK, OK…What Should I Do?
Get started, today.
Before You Start
• Good asset protection seems real silly, like
major overkill….until you need it.
• Then it’s called a fraudulent transfer.
• Get used to hearing, “Why would you want
to do that?” and “You can’t do that."
• Educate yourself
Asset Protection Fundamentals
• Own nothing in your own name
• Use a variety of entities
–Trusts, LLCs, Corps, FLPs
• In a variety of states
K.I.S.S.
Keeping It Simple isn’t Smart
How Do I Protect My Real
Estate?
Methods To Hold Real Property
• Personal Name
• Living Trust
• Corporation
• Limited Liability Company
• Limited Liability Partnership
• Land Trust
Personal Name
• NO liability protection
• NO privacy
• Report taxes on Schedule E
• NO annual fees or paperwork
• NO annual meeting
Living Trust
• NO liability protection
• Some Privacy
– Don’t use your name in the title or be trustee
– Beneficiary deemed to own equitable title
• NO additional tax return
• NO annual fees or paperwork
• Tax Neutral
Corporation
• Liability protection
– Can only lose what corporation owns
• Some privacy
– Officers are public record
• Additional tax return
• Annual fees and meeting
• Not tax neutral
Limited Liability Company
• Liability protection
– Can only lose what company owns
• Some privacy
– Officers are public record
• Additional tax return
• Annual fees but no meeting
• Tax neutral
Limited Liability Partnership
• Liability protection
– Can only lose what partnership owns
• Some privacy
– Two partners are public record
• Additional tax return
• Annual fees but no meeting
• Tax neutral
States That Statutorily Recognize
Land Trusts
• Florida
• Georgia
• Hawaii
• Illinois
• North Dakota
• Virginia
Land Trust
• Liability protection
– Can only lose what land trust owns
• Privacy
– Trust not public record
– Beneficiary deemed to own personal property
• NO additional tax return
• NO annual fees
• NO annual meeting
• Tax neutral
LAND TRUST
Real Estate
Real Estate
Rapid City
Trustee LAND TRUST
North Dakota Resident North Dakota
Beneficiary
RE RE RE
RC RC RC
Trustee LT LT LT
North Dakota Resident ND ND ND
Registered Agent LLC
Wyoming Resident Wyoming
Beneficiary
Real Estate
Rapid City
Trustee LAND TRUST
North Dakota Resident North Dakota
Registered Agent LLC
Wyoming Resident Wyoming
Trustee LIVING TRUST
You South Dakota
Beneficiary
This Is Just The Beginning
• Don’t try this at home
• The devil is in the details
• Educate yourself
• Educate your attorney
• Educate your accountant
Our 30 Years of Experience Runs
Deep
• Operate multiple businesses
• With over 40 employees
• Instruct nationally and internationally
• Columnist for 10 years
• Several financial and real estate degrees
– CFP™, ChFC, CCIM, GAA
– Masters in Wealth Management
Our Broad Experience Means:
• We give you tried applications, not theory
• You learn from our experiences
• We see the bigger picture
• We know the answers to the questions you
don’t ask
• You get better, more balanced advice.