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• Returning deposits• Illegal contracts• Lead paint• Injury to tenant• Pools• Smoke detectors• Failure to maintain

• Injured visitors• Inadequate door locks• Drug dealers• Liability for manager• Failure to remove trash• Violations of laws• Damage by workmen• 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

LAND TRUST North Dakota

Real EstateRapid City

TrusteeNorth Dakota Resident

Beneficiary

LT ND

RERC

TrusteeNorth Dakota Resident

Beneficiary

LLC Wyoming

Registered AgentWyoming Resident

LT ND

LT ND

RERC

RERC

LAND TRUST North Dakota

Real EstateRapid City

TrusteeNorth Dakota Resident

Beneficiary

LLC Wyoming

Registered AgentWyoming Resident

LIVING TRUST South Dakota

TrusteeYou

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.