Remember, your plan is only useful to protect if your assets are titled in the name of the plan. The funding of the entities in your planning is critically important and is the responsibility of you and /or your spouse.
For your convenience, we have created this resource page to provide you with general information on funding and links to maintenance and tax reporting documents for each of the specific entities which may be in your asset protection plan.
Lodmell & Lodmell cannot complete the funding process for you. We can, however, assist you in this important process. We urge you to take the time to complete the funding process.
Should you have questions about how you can fund your existing plan, or if you’re interested to develop an asset protection strategy, call Lodmell & Lodmell today. We’ll be happy to answer your questions.
Funding Basics
- Primary and Second Homes (non-rentals)
The first asset you need to consider is your primary residence. If you live in a state with fantastic homestead protection like Florida or Texas, then you don’t need to do anything. Your home is protected. Otherwise, you need to provide some protection for your home. The typical way to do that is to transfer or “deed” your primary residence into your asset protection trust. The same is true of any second homes that you own but don’t use to generate rental income.
- Rental Properties
Rental properties are slightly riskier than non-rental properties. As a result, there needs to be some additional insulation around them in order to protect your other assets. That additional insulation comes in the form of a limited liability company (a “LLC”). The funding works as follows:
- The LLC is created, and it is owned in the exact same proportions as the rental property to be transferred.
- The rental property is deeded into the LLC.
- The LLC is transferred into your asset protection limited partnership.
It’s very important that you follow the exact sequence described above, because in some instances it can save you money by avoiding transfer taxes and/or a reassessment for tax purposes (check with your local taxing authority and clerk of court to make sure).
- Safe Assets
Cash, stocks, bonds, precious metals, and jewelry are all considered “safe assets.” That’s because they can’t generate liabilities for you. Think about it like this: Someone can get injured on your rental property. That’s just not true of your safe assets. Because of this unique feature, your safe assets can be owned directly by your limited partnership, without the need to insulate those assets with an LLC.
- Vehicles
Vehicles are very risky assets. As a result, they should be left outside your plan completely. Own vehicles in your personal name, and trust that your other assets are safely protected.
General Funding Guidelines for Asset Protection
Asset Protection & Estate Plan Structures
The Asset Management Limited Partnership™
The Asset Management Limited Partnership™ (AMLP) centralizes the management of liquid assets – cash, savings, investments and securities – while placing a legal barrier around them.
- Maintenance & Tax Reporting Information For Your Asset Management Limited Partnership (AMLP)
- AMLP Advisor Letter (sample)
The Bridge Trust®: Offshore Protection with Domestic Simplicity
The Bridge Trust® combines the strengths of the offshore asset protection trusts, while avoiding their weaknesses. It is an Asset Protection Trust registered offshore but which is domesticated for tax and administrative purposes.
Limited Liability Company (LLC)
The Limited Liability Company’s primary role is to compartmentalize “risky” assets that should not be directly mixed with safe assets held by the AMLP.
- Maintenance & Tax Reporting Information For Your Limited Liability Company (LLC)
- How to Amend an LLC Operating Agreement and Articles of Organization
- Amendment Form to Change a Member of an LLC
The Nevis Limited Liability Company (LLC)
The LLC is a fantastic legal tool for integrating assets and businesses into a full estate and asset protection plan.
Financial Institution Due Diligence
Documentary Transfers and Exemptions
- Instructions for California and Florida deed transfer when funding an LLC or Trust
- Maintaining the Community / Separate Property of Assets