I have not started R.E investing but have accumulated assets in the forms of stocks, mutual funds, CD’s, 401k, IRA and cash. I’m single and I guess that makes me ineligible for a Family Limited Partnership. What entity or asset protection method can I use to protect myself from lawsuits?
Your best bet for personal asset protection is an LLC; for protection of your real property, it’s a land trust.
Da Wiz
I don’t have real estate and assuming I don’t accumulate any real estate, do i just transfer ownership of my stocks, funds and bank account into an LLC?
Also, if I personally am in a lawsuit, could they come after my LLC which is holding all my assets?
You cannot transfer IRAs or 401(k)s into an LLC, but da wiz may have suggestions involving a trust arrangement that might work.
If you want a tax advantaged retirement program it’s pretty hard to find one that even comes close to what Land Trust combined with a self directed Roth IRA can do. You need to know what the tax advantages are and how to structure them, but if the government knew how this works they would probably try to outlaw it (that’s the best recommendation I can give for it!)
Da Wiz
do you prefer IRA controlled by a custodian or without a custodian and why ?
Da Wiz;
Quick question, Lets say I set up a self dirrected Roth IRA with money from an excisting company, (this money is tax differed correct?). Now with the self dirrected IRA I contribute the money to a new LLC that is going to hold a piece of real property. Im begining to see that I need the new LLC to be the benificiary of a living trust that holds the real property. In holding the property in a living trust, and funding the benificiary (new LLC) through a self dirrected Roth IRA, I would see great tax advantages correct?? Am I going about this correct, or does the IRA need to be either the trustee/benificiary to see the tax benifits??
Thank you in advance
You’ve got the idea but your trustee should always be a professional non-profit entity specifically and solely engaged in the holding of titles in land trusts.
A reasonable trustee fee is charged, which is well in line with industry standards is charged, enabling the creation and funding of an un-paid 3rd-party collection & disbursement entity (a free bill paying service for the benefit of members).
Cannot die (re. Probate issues), and is well backed financially to allow for careful adherence to all laws. rules and regulations relative to reporting and maintenance of a consistently good standing with the state.
Fully bonded as a trustee for title holding, beneficiary directed, 3rd party trustee nominee title-holding land trusts.
Fully recognized as a bona fide holding institution by any court that would/might be challenging the integrity and structure of the land trust or holding to adherence to statute and or standards in states wherein land trusts per se are specifically legislated and authorized
Functions a fully unbiased and unassociated third-party title holder (“escrow-type)” holding entity.
ONE’S SELF AS TRUSTEE:
Risky and quite probable failure to honor privacy and anonymity, especially under threat of legal action.
An individual trustee’s failure to charge a fee would not support the land trust’s validity in court. The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.
If a trustee is also a beneficiary, a merger of title is created (see Doctrine of Merger), invalidating the trust if challenged in court as being a bona fide land trust.
An individual would most likely never be bondable as a trustee and would likely not have the resources to provide a completely separate, free and bonded collection and bill-paying service.
An individual would not be seen by the courts as a standard trustee, charging fees “commensurate with industry standards”: therefore severely impairing the integrity and structure of the land trust.
One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary as a mutually trustworthy holding entity. Such likely bias obviously would not be in the best interests of any of the co-beneficiaries.
Good luck.
Da Wiz
Set up two beneficiaries, one for you personally and one for your Roth. That way you can split profits and take some now and some later… tax free!
That’s it.
Da Wiz