I came across this video which alerts us to the importance of being prepared for potential financial problems in the years ahead.

The video speaks for itself…

Mark Kohler has written an excellent book introducing the concepts of Asset Protection for regular people and small business owners. This book gives a good understanding of when asset protection is necessary, and walks you through the basic methods, starting with the simplest that people can do themselves… and working up to more complex strategies that are needed by a relatively few number of people.

It is called “Lawyers Are Liars”…

He lays out his multiple barrier approach which puts up sequential lines of defense up against potential creditors, and makes a strong case for using such a system.

He also talks about the values of corporations in protecting personal assets, and I think this is a good intro to my www.corporateveilpro.com step-by-step corporate records system to avoid having your corporate veil pierced.

I recommend Mr. Kohler’s book to every small business person I talk with about these corporate formalities…

Have you heard the phrase “closing the barn door after the horse has already left”?

Current economic conditions have people scrambling to put asset protection strategies in place.

They may be attempting to close the barn door too late…

Fraudulent transfer laws are in place which typically have a four year statute of limitations or thereabouts.  They KNOW that people in trouble will try to “hide” their assets and they want to make it hard to do so.

These laws have mechanisms in place to reverse or set aside any transfer or conversion that was made within the statutory period.   These laws will nullify transactions that are meant to put assets out of the reach of creditors

If you wait until you are concerned about a claim on your assets, your interest in asset protection is simply too late.  The horse has left the barn already.

I hope your horse is still in the barn…

In that case, it makes sense to educate yourself about asset protection AND CLOSE THAT BARN DOOR.. .

Hi all,

Back in the old days, people built forts and castles to protect their stuff and their families…

Now we have corporations to help protect our assets… if we use them correctly.  If we don’t they are like a fort with all the gates open.

I want to help as many corporate owners as possible to get their records in order during this economic downturn.

I want them to have the peace of mind that comes from knowing you have done everything you can to strengthen the liability protection of your business… and protect your family.

And, at the same time I don’t want to make people wait a few days for the physical product to make its way through the Priority Mail process to their house.   I want them to get the info immediately…

So, I have decided to create a lower-cost digital version of the 7-step CorporateVeilPro system that has helped protect many small corporation owners.

I will be calling the digital product CYA: Cover Your (Corporate) Assets… (the name came from a brainstorm at Kevin Hogan’s Wealth Camp by Mike Morgan, David Garfinkel, Kevin, and some other superstar marketers)…

This will be a lower cost version of Corporate Veil Pro, which is the full multi-media version including CD interviews,etc. 

I will probably also put this on Clickbank… Any thoughts?

This will be available on October 15th so look for the special announcement…

This is a major no-no for corporate financial record keeping.  It can hurt you in so many ways. 

First, what is co-mingling?

Co-mingling of assets involves the owner using business resources for personal purposes, or the business using the owner’s personal resources for business purposes.

First things first.  You need to have separate bank accounts for your corporation and for yourself personally.  This is an absolute must.

In the next few days, we’ll discuss several scenarios of co-mingling…

Many asset protection strategists tell you that you need to incorporate in Nevada and they’ll help you do it.  Now, if you actually live in Nevada and plan to operate the business from there, then Nevada is most likely the best place to incorporate.  But if you plan to operate elsewhere and have no other ties to Nevada this is probably not the best place to incorporate.

The major reasons that they usually give for a Nevada Corporation are privacy, better lawsuit protection, and tax savings.

Let’s look at these three reasons—

1.      Privacy.  The thinking is that it is possible to incorporate in Nevada and not declare who the owners of the corporation are.  This would supposedly allow you to remain under the radar of any creditors.  But in reality, there is no way that you can remain anonymous and still operate the business.  Even if you were able to have a surrogate (they call them nominee agents) listed as the directors and officers of your business, how are you going to operate the business day-t0-day and sign paperwork etc?  Lastly, if your business is sued, the opposing lawyers are going to be able to get your names anyway. Strike 1.

2.     Better Lawsuit Protection. Basically, if the event that prompted the lawsuit occurred in another state, you will not be able to hide behind Nevada’s favorable laws and you will not see any higher level of lawsuit protection.

3.     Tax Savings. Nevada has no income tax or corporate tax, but if you are doing your business in another state then you are almost certainly liable for the taxes in that state.  So, no tax savings. Strike 3.

For most people, the best place to incorporate is their home state…

Have a great day.

Rob

PS: This is not intended as legal advice, check with your own attorney and accountant for the specifics of your case.  Just look long and hard at anyone telling you that you need to buy a Nevada Corporation through them…

Happy Sunday Night!

As a reader of this blog, I would like to also connect with you through Facebook and Twitter…

Please “Add Me as a Friend” over here on Facebook… http://www.facebook.com/people/Rob-Northrup/1165743984

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Have a great night!

Hope everyone had a great Mother’s Day!

Hit the Play button below for a musical accompaniment to this blog post… and per Don’s request yesterday I went with one of my favorite Willie Nelson tunes…

 
(I know this music stuff is getting old but I made a few more changes and I want to make sure I’ve got the audio all figured out before moving on to video)

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Now I’m getting ready to go see customers this week up in the Carolinas.  I have eleven meetings scheduled for Tues-Thursday, eight of them are with people who have active projects.  Things are starting to get better for manufacturing plants out there in flyover country…

The only way to really stay close with some of your customers and find other opportunities is visiting them and seeing them face-to-face.  One of the greatest assets any small business has is the relationship that the sales pros have with your customers…

Once I get back home Thursday night, I have a quick trip to Memphis and Graceland planned for the weekend with a big Elvis fan!  That is going to be a blast…

Have a great week and talk to some of your customers in person!

Rob

Is your Email system a valuable business asset?  You bet…

For many business people, the information contained in their email system is one of the most PRICELESS things they have.  It has records of conversations, most likely information about orders and project, as well as travel info and support material that could come in handy.  We also tend to hold onto things way too long (out of nostalgia or fear?)…

A week ago, I woke up to 1435 messages in my Inbox, 99% of them exactly alike.  They were from my business partner, and said…“My email is acting strange…” 

You’re telling me…

This message was stuck in his Outbox and wouldn’t ever move to the Sent folder, and it couldn’t be deleted from the Outbox which gave an error message.

I spent the day today helping my business partner to recover his email system on his computer.  I went over to his house and tried all the simple things I knew to do to try and unstick this message from his Outbox.  We ended up getting the latest version of Office (2007) and upgrading both of our computers.  On the new software I was able to get in and delete the file.

And it also showed me what the error was that had caused this whole fiasco.  His Outlook data file (.pst file) had gotten to the Max allowable size and this froze up the system.  Nothing could be deleted because in order to delete something it has to get put in the Deleted Files folder before it gets removed from the Inbox, and there was NO ROOM.

Total time spent 4 hours… And a lot of concern we would lose data…

So, clean out those files and get rid of garbage.  You can sort by size and eliminate those old files with huge attachments that you don’t need.  And make it a point to backup those .pst Outlook files as well.  If they get corrupted, then you don’t want to lose all this valuable history…

This is a good thing to do on an airplane or late at night when I am travelling for an hour… Culling out old worthless emails. And looking for forgotten treasure at the same time…

Happy Cleaning…

Rob

Why Do You Need to Protect Your Assets?   You live a simple life, not bothering anyone…

Do you think that you have to actually do something wrong in order to have people sue you? 

The answer is NO.

If you have assets, you are the potential target of a lawsuit…

Today in my email, scattered in with the Viagra offers, and the latest Internet Marketing “magic pills” came this spam from a “friend” named “Legal Advice” with the subject line “Be Protected”…

If you have been badly injured in the course of getting medical treatment, you may be able to win compensation through a medical lawsuit.

 

If you or someone you care about went into the hospital only to have a medical condition get worse instead of better, you should get intouch with a medical malpractice attorney.

 

Take the first step by finding the right service that will review all relevant medical records, interview medical staff involved, consult with medical experts in related medical fields, and give you an honest assessment of your medical malpractice case.

 

A company that will work efficiently to protect your best interests, and provide timely feedback along the way to enable you to make informed decisions.

Some shark lawyers (like John Edwards, former VP candidate who actually channels his dead patients for the jury) make their millions from drumming up bogus cases and making them into the most horrible things imaginable.  Then they select a jury of people who have been conditioned to think that anyone who has two nickels to rub together probably stole it from a poor working person.  Justice is served by playing Robin Hood and leveling things out.

I find it pretty disgusting that they are using spam in order to try to find victims to sue.

If you have a car, or you have employees or children, or worse yet both… You could be one phone call away from a liability lawsuit and you can only protect your things ahead of time.  Once the phone call happens, it is too late.

You probably aren’t a doctor, but if you have assets you never know what kind of thing might happen to put you at risk.  Better to plan ahead and protect what is yours from these frivolous claims.

Seize the Day,

Rob

One of the most basic things to understand about asset protection is that it needs to be pro-active.  Things need to be set up properly and the assets properly protected PRIOR to any lawsuit or other creditor action.

In 1984, the Uniform Fraudulent Transfer Act was modernized and the primary intent is to protect creditors (people that have a claim on part of your assets) from fraudulent attempts by the debtor to hinder, delay or escape paying their debts.  This typically is accomplished by fraudulently conveying (giving) away your property to someone else without receiving similar value in return. 

How does the court determine if a transfer is fraudulent?

The primary issues that come into play with such transfers are the intent of the debtor—was he or she acting in a fraudulent manner to escape this debt?  A few questions that are asked:

□      Was the transfer made after the creditor action?

□      Did the debtor suspect the creditor action?

□      Did the debtor attempt to hide the transfer?

□      Was the transfer made to a relative, close friend or business associate?

□      Was the transfer unreasonable? (was it a fair exchange?)

In cases where the transfer was fraudulent, the court will often reverse the transfer leaving your assets available to satisfy the debt.  I think these laws are fair, and I don’t believe that people should shirk their legitimate debts through such fraudulent tactics.  It is in your best interests to put together a complete plan to protect your assets within the letter and spirit of the law before any trouble arises.

If you wait, it is too late…

Rob

Liability Insurance is designed to pay off someone who is harmed or damaged by another person or entity.

There are injuries that the “business” does, as an example if I own a store and you fall in it, then the business liability insurance would pay for the damages and if there wasn’t enough insurance then the assets of the business would be used and if there weren’t enough business assets, then the company would be bankrupt.  They would not go after the owners of the company for their personal savings to satisfy the debt unless there was criminal activity or fraud involved.  The “corporate veil” would protect you.

So, the business insurance protects the assets of a business since the insurance is used to pay off the claim instead of the business assets themselves.  If you don’t have enough insurance, then your business assets still are at risk after the insurance is tapped out.  So, having a thorough analysis of how much risk you are taking on, and insuring against that amount is vital.

There are also injuries that people do personally, say that you kill someone with one of your cars and they sue and win a $25 million judgment against you personally.  In this case, they are going to get the full amount of your liability insurance first, then they will force you to sell everything you own that is not protected (example: homestead exemption in some states, retirement/pension accounts and income in some states) in order to satisfy the judgment.  One of these personal assets is your ownership stake in any businesses you own.  If you own part of a business, they could force you to sell your part of the business to raise money to pay off the creditor.   (There are much more advanced asset protection strategies like trusts that provide more protection but this is beyond the scope of my expertise).

I personally do not think that assets can ethically be shielded from creditors if they are based on legitimate harm that you caused.  But as we know, there are many frivolous actions and lawsuits every year and the most ridiculous ones can be stopped by taking sensible actions to protect yourself.  In this case, the unscrupulous person will find an easier target.

One of the easiest things that people can do to protect themselves personally is to have enough liability insurance on their vehicles, and to carry an “umbrella” personal liability policy for at least $2 million.

Hope this makes sense…

Rob

Insurance is something that most people consider extremely boring.  Policies, coverage, riders, exclusions, blah, blah, blah… It is the one thing that we buy that we hope NEVER PAYS US BACK…

We tend to ignore our insurance, until an accident or other event occurs… and then we dive into the small print of our policy with gusto.  And sometimes swear at the things that we thought we covered but aren’t.    

So, there are two factors that determine what the insurance company is going to charge us for a policy—1) what is the amount of the loss we are trying to protect, and 2) what is the probability of the event occurring.

Just as a simple example, you have Homeowners insurance… let’s say your house and contents are worth $400,000 (not including the land which will still be there no matter what).  In a given year, if there is a 0.25% chance of you having a fire or other cataclysmic event that would cost the insurance company that $400,000, then they would charge you about $1000 a year plus their overhead plus a profit for themselves to take this burden.  As long as they made proper guesses about the probability, then they will do well, and the 0.25% of people that suffer the huge damage will be able to recover.  The lucky 99.75% paid their $1200 safe in the knowledge that a disaster wouldn’t ruin them.

Some things are not big enough to worry about insuring against—when you are able to handle the risk yourself and afford the cost of the event, then this is called being self-insured.  Many people with cars that are paid off do not insure their cars against collision (relatively small bucks), but only against the liability claims of someone who might be injured (could be big bucks if death or serious injury occurs)…

In business there are a number of key insurance areas that need to be looked into…

• Automobile Liability
• Home Office
• Business Interruption
• Professional Liability
• And many others…

If you have an Insurance Agent, they are a vital part of your team and you need to schedule a time to review your coverages.  Another new concept is what is called a Business Insurance consultant, and these professionals will review all your risk areas, and help you get the right coverages without any bias towards particular insurance companies.  This is a great way to proceed if you don’t already have coverage. 

Having the proper insurance in place so that the “Black Swan Event” doesn’t cost you everything is a vital asset protection strategy…

Have a safe and well-insured day!

Rob

Without hiring a lawyer or creating anything fancy, there are some things that we can do on our own to protect our assets from those who would like to get their hands on our stuff.  In the coming days, we’ll discuss some simple things that everyone can do to better protect themselves.

The “Homestead Exemption” strategy is one of the reasons why O.J. Simpson was able to live in a nice home while he tracked down the “real killer” across the great golf courses of the world. (Before his abject stupidity kicked in again and led him to commit another crime that will see him probably die in prison where he belongs). 

What is a Homestead Exemption?

If you own your own home, most states offer a “Homestead Exemption” which offers some legal protection for your house.  In some states this is automatic and in others you need to apply specifically for it.  Usually, these laws will only allow you to protect one primary residence and sometimes there is a limit on the value or the acreage that may be protected.

Homestead exemption laws typically have two main features:

1.  They prevent the forced sale of a home to meet the demands of creditors (except to satisfy mortgages, mechanics liens, or to pay property taxes)

2.  They provide some exemption from property taxes applied to the primary residence

So, they can’t make you sell your house if your lose in a lawsuit, and you get some tax savings every year at the same time!

You need to check this out for the state where you live to make sure that you are taking advantage of this “free” asset protection strategy.

We’ll look at another simple strategy tomorrow… Ciao, Rob