Establishing Privacy Through Asset Protection

Let’s face it, with the advent of google and easily accessible online document portals, privacy is a relic of the past. The internet makes it so that anyone can conduct a quick search for the current title owner of property. It’s common for attorneys and other litigators to use simple deed searches to determine who can be sued for real estate, personal injury, and landlord/tenant disputes. And, if you do find yourself involved in litigation, then your property may be used to satisfy a judgment entered against you.

By placing your assets into a specialized “asset protection” style trust, you can create layers of anonymity to help insulate your property from creditors and potential litigants. An asset protection style trust can also aid in preserving your generational wealth, as it will allow your family to avoid the high costs of probate upon your death. Nevertheless, the most basic function of asset protection is to disassociate your name from property you own to protect from potential lawsuits.

How Creating a Trust Can Take Your Name Off Title

You’d be surprised at just how easy it is to connect your name with a specific property. As mentioned, since deeds and other title documents are publicly accessible documents, almost anyone can perform a preliminary title search to ascertain property ownership. Title searches are a useful tool often utilized by creditors and litigators to analyze who to bring a lawsuit against. Additionally, confirming property ownership helps creditors determine whether they could successfully recover from bringing a lawsuit against you.

Therefore, as a property owner, you should want to make it more challenging to link your name to your property. For these purposes, I usually advise my clients to place their assets in a trust which names an LLC as trustee. By transferring property into this type of trust, title will now be held as “ABC, Trustee of the XYZ Trust,” and this is exactly how title will appear on your deed. Note that for this type of holding, you will want to name the trust and the LLC something that cannot be easily associated with you or your family.

This method of asset protection establishes a basic layer of anonymity with respect to your assets. It is essentially a first-line defense against publicly accessible information. However, there are many different styles of asset protection, with each providing an added level of protection and concealment.

Adding Layers of Protection for Your Specific Needs

There are additional steps you can take to create added layers of anonymity for your assets. For instance, to prevent your estate from being attached to lawsuits and judgments, you can create an irrevocable trust. When property is placed into an irrevocable trust, the property becomes the beneficial property of someone else, and therefore, it cannot be used to satisfy judgments against you. A major downside to an irrevocable trust is that it cannot easily be modified. Also, by severing strings to your property, you forego a certain level of control over the property. Thus, this may not be the best style trust for your specific needs.

Having the Best of Both Worlds by Naming an LLC as a Beneficiary

To really build up your shield against creditors and judgments, but still maintain control over your property, a land trust can be created where an LLC  is listed as trustee and another LLC is listed as a beneficiary. This makes it so title to the property is held under the trustee LLC and you can protect against creditors by giving beneficial ownership to the second LLC. With this type of trust, you can still retain a level of control over the property, but also prevent your property from being considered part of a satisfaction of judgment.

While the LLC trustee and beneficiary land trust may seem like the most protection, setting up this structure can be expensive and, depending on your specific needs, it might not be the best approach for you. Therefore, it’s important that you consult with an attorney to determine what your best course of action is.

The Importance Working with an Experienced Asset Protection Attorney

Asset protection is a niche area of estate planning which can be extremely beneficial for property owners, business owners, and high net worth individuals. However, asset protection can get quite complicated, and therefore, you should work with an experienced asset protection attorney who can guide you in navigating these complexities.

At Aliav Law, we have drafted many asset protection style estate plans for our clients and have delivered proven results. We take pride in creating unique trusts which offer the most protection for you and your family. We’d love to help you achieve your privacy goals and preserve your family’s wealth. Call (310) 800-2911 today to speak with me about setting up an asset protection style trust.