Secrecy and Asset Protection
Secrecy and Asset Protection
Secrecy and Asset Protection
Hi, this is asset protection attorney Gary Fales. Today I want to talk with you about making your assets secret. The truth is, no good asset protection plan is going to be built around secrecy. In this day and age, the assets are going to be discovered sooner or later. You need to protect yourself by having real substantive strategies that work, not strategies that rely on secrecy.
The creditors (or the person who is suing you) are eventually going to discover your assets anyway. Let me tell you why: If you are sued and you lose and you end up in the debtor's exam, you'll be under oath to answer their questions truthfully.
If they ask you about what kind of real estate you own, or the piece of property that you own over in Mexico, or in Oklahoma, or in California, and you lie about it, then that is perjury. Perjury is a felony, and by definition of a felony, it is punishable with a prison sentence of one year or more. If you lie about the assets, and you know that you own them, then you're looking at potential prison time. It's just simply not worth it.
That is one of the reasons why I don't necessarily like Land Trusts and the way they're used. The Land Trust is a concept where you place your asset (your piece of real estate) into the trust that has a different name. The trust doesn't have anything associated with your name, except that you're the beneficiary. The problem occurs if they ask you if you're the beneficiary to a trust. You then have to tell them the truth, "Yes I am." Once they find out the character and nature of that trust, and that it offers you no underlying protection, the assets are going to be taken from that trust, as if you own them yourself.
The problem with this scenario is that, because you know this, you may want to tend to lie about the real nature of the asset in that trust. They may ask, "Are you the beneficiary of XYZ Trust?" and you might be thinking, "I wonder if they're ever going to find out about it. Is there any connection linking me to that trust?" If you think you're foolproof, and that no one could ever find out about it, then it's possible that you could lie. And that's just not a good way to go; it's not a good strategy.
I would prefer that you simply tell them the truth about everything you own, if you do own it. If they ask about any gifts or transfers that you've made, you tell them the truth about the transfers, and then rely on the good solid planning that has been done. That's one of the reasons why I love the asset protection trust. You can transfer the assets into this trust (while still maintaining a great deal of control over the trust) but once those assets have been in there for a certain period of time, they cannot bring an action against the trust assets and try to reverse them.
So the story is a lot different if you would have transferred the real estate into an asset protection trust. When they ask you "Are you the beneficiary of a trust?" you can tell them the truth, "Yes I am." Then, if they try to bring an action against that trust, if the proper seasoning time has occurred, then they cannot be successful.
I often have people who want to go to great lengths to be anonymous, or to not have these assets revealed. I think it's a crummy strategy that is not worth our time and certainly not worth our effort. It takes a great deal of effort to truly become anonymous, and even then if you file tax returns (which I assume you do) they're going to find out by issuing a subpoena for your tax returns.
Therefore, you need to just plan on the fact that your assets are going to be revealed, and then if they are revealed, you want to make a plan that is actually going to have a strong foundation to protect you.
This is asset protection attorney Gary Fales; I hope that was educational. I'll talk to you soon, thank you.
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