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00:00:00 one of the questions that I often get is related to who is a good candidate for an asset protection trust so I often get phone calls from people who are interested in asset protection trust uh I should specify self-settled domestic asset protection trust and after having a conversation with the person we often realize that that they’re not a good fit so today we’re going to talk about the top five people who are candidates or most likely need a domestic asset protection trust so let’s get into it
00:00:31 so like I said I get phone calls all the time from people who are interested in domestic asset protection trust but after we have a a conversation for a little bit we come to realize they aren’t the right fit so let’s talk about these top five individuals who are best suited for a domestic asset protection trust but real quick as a reminder what is a domestic asset protection trust so it’s a self-settled irrevocable trust meaning that the client sets the trust up and a revocable trust app for their
00:01:01 own benefit and they put their assets they fund the trusts with their own assets and then they have this beneficial interest in the assets um and then it’s what’s called a directed trust so they carve out or part and parcel the different trustee responsibilities the one they retain for themsel is What’s called the investment adviser and so that means that they uh continue to manage the assets the same way as if it was in their individual name and uh so they can sell assets buy leverage whatever it may be there’s a
00:01:33 distribution adviser or distribution committee that’s in charge of deciding when to make distributions to the to the client who’s the beneficiary and then we also have a administrative trustee who is um usually a I like to do my my domestic asset protection trust in South Dakota because their laws are so flexible and this is usually a Trust Company administrative Trust Company in South Dakota and they just do the administrative function uh open bank accounts actually make the distribution when the distribution adviser or
00:02:04 committee tells them to do so they pull together tax documents or um you know might prepare any type of uh tax returns related to the um to the to the trust so anyway let’s get into it so top five first one is a public figure so a public figure could take you know the form a lot of different different it could take the shape of a lot of different things so it could be maybe a celebr um a um an Entertainer social media influencer um I’ve had people who are in charge of um different types of of of public
00:02:44 Civic activities um people who are politicians so there’s different types who just in the Forefront of the community for a variety of different reasons they’re public figures and so a lot of people know these public figures and they become a Target Target because of their place within the community and so they want to make sure that they’re protecting their assets from any type of frivolous lawsuits that may be out there related to them being someone who’s well known all right so that’s number one
00:03:14 number two is doctors so there’s a lot of different type of Physicians some are surgeons they actually perform surgery others are not they provide more consultative um uh treatment to their to their patients but either way doctors are under extreme legal scrutiny because of the nature of of what they do so as you know there’s personal injury attorneys Plains attorneys and their entire career is spent on suing people like doctors who maybe have committed negligence or malpractice I I shouldn’t say maybe have committed it may not even
00:03:47 be that they’ve committed it right it could be that there’s just someone looking for a large payday um whether it’s the patient or whether it’s the client so because doctors do highrisk work they are subject to Greater legal scrutiny therefore a domestic asset protection trust can make a lot of sense for them um and I include Dennis in that as well I get a lot of inquiries from Dennis so positions are number two so number three on the list uh is business owners so um a lot of business owners they have a lot of risk maybe they’re
00:04:22 producing some type of uh in law school we always talk about kind of the hypothetical widget you know you man manufacture widgets whatever widget actually are but a lot of business owners they actually produce some type of product and maybe it’s a product that goes into a car or maybe it’s uh it’s food or maybe it’s a some a dental implant or or it could be anything right or maybe it’s a logistics um company business owner and they’re shipping and making sure that product a gets to or product gets from point A to point B so
00:04:52 there’s a lot of different type of business owners out there who because of what they do might end up getting sued so they want to protect the business they want to protect their personal assets and so the domestic asset protection trust provides a layer um an additional layer a lot of them have llc’s that maybe they’re setting their business up as um and they’ll put that into the trust um and so now you can have an LLC that you personally don’t even own so your interest is held by the by the trust and then um any personal
00:05:24 assets that you might have you can put that in the trust as well anyway you have very strict compartmentalization of business assets ass and personal assets nothing’s in your individual name so even if there was a personal creditor against you most of your assets are actually in this trust therefore they’re going to be protected from those personal creditors similar to that is executive so you may not actually be so this is number four the fourth type of person who really needs a domestic asset
00:05:49 protection trust it may not be a business owner but it could be someone who is very professionally successful because they are an executive a chief operating officer a chief Financial Officer a um Chief investment officer a chief executive off officer anyone in that se Suite is someone who could be exposed to to Greater legal risk and scrutiny because of the nature of their job and being an executive they’ve likely have done really well for themselves and maybe they have different type of compensation packages deferred
00:06:24 on comp they have things that are going to vest down the road uh maybe they have they end up receiving an ownership interest in the business at a different time so there’s different things that go into that but they are because of the nature of what they do because they’ve been professionally successful and been compensated well for that over over the life then they have a lot to lose so they’re number four on the list of who needs a domestic asset protection trust and number five so number five is anyone
00:06:53 who has received a large inheritance so um often typically if you’re going to receive a large inheritance the best way to receive it would be in a trust so let’s just say parents leave the child or children a large inheritance the best way to do that is to leave it inside of a trust rather than in the child’s individual name and the reason for that is because it’s going to be protected from wealth transfer taxes so think about estate taxes um generation skipping taxes it’s going to minimize those it’s also going
00:07:27 to protect the assets because it’s not in the child or children ‘s individual name or names and so if there’s a personal creditor or there’s a divorce something like that then it’s it’s not in the child’s name um and it’s in the trust but often parents don’t seek the right legal counsel they don’t leave a trust for the benefit of the child and pass the inheritance there so in that event if someone a child receives a large inheritance and they’re like what do what do I do here I want to protect this a domestic asset protection trust
00:07:59 is often a Sol solution so real quick we’ll go through the top five again we said um public figures we said uh Physicians doctors dentist number three on the list is um business owners number four is Executives and number five is anyone who receives a large inheritance so if that’s someone if that describes you then there’s a good chance that you do need a domestic asset protection Trust [Music]