Most of the time in crypto, you'll only hear people talk about how to make money.
You'll hear countless videos about trading, staking, airdrops,
and the list goes on and on.
Something we need to talk about more often is how to protect the money and assets
you make along the way.
If you're going to put in countless hours making life-changing gains,
it makes complete sense to have a multilayered comprehensive strategy
to protect everything you worked for.
This might be one of the most important videos you'll watch all year.
So let's get it!
Welcome to BitBoy Crypto!
My name is Ben.
Today, we're going to be talking about protecting your assets.
To start off, understand that asset protection is a deep rabbit hole
because it varies from person to person.
For instance,
if you own a home,
run a business,
if you're married,
if you're employed or even unemployed.
Not only that, but the rules also vary from state to state
as they all have slightly different laws and regulations.
Despite all the uncommon denominators,
I'm going to do my very best to give you all the information you need
to take the next step to protect yourself and your hard-earned assets.
Also, keep in mind, this is not financial advice.
But if this video inspires you to move forward with an asset protection strategy,
make sure you do so with a qualified professional.
Some of you might think you don't need an asset protection strategy.
But what if you get sued,
get divorced,
or if a crypto exchange tries to claw back your money from you because they went insolvent?
Celsius
What I'm saying here is that life happens.
And if you want to keep everything you worked for,
you need take this seriously.
Before we break the ice on the specific asset protection strategies,
we first need to cover one of the most important concept in this video.
That concept is don't wait till it's too late.
I'll say it again.
Don't wait till it's too late.
If you go to employ an asset protection strategy after the lawsuit begins,
court is going to define this as fraudulent
because you're only doing it to avoid paying the legal judgment.
If the court decides that you're attempting to defraud a plaintiff,
they could very well put a freeze on all your assets,
preventing you from transferring them until the case is resolved.
Don't wait till too late to get your ducks in a row.
Quack, quack.
If you have your asset strategy set up before an unfortunate circumstance,
you will be in the clear.
And you'll be glad that you did it.
Of course, I'm not a legal or financial expert,
so make sure you speak to somebody qualified to make that decision for yourself.
So now let's take a dive into different asset protection strategies.
First stop here is an obvious one.
Insurance
This here is a large umbrella
considering there's personal insurance, life insurance, car insurance, business liability,
and the list goes on and on.
Keep in mind, it's different for everyone based off your needs.
Insurance on its own is a big enough topic to do a whole video on by itself,
and even if it's a big headache,
you don't want to get caught without insurance.
Trust me.
You want to be well insured because if anything happens,
the insurance company is taking the big dent,
not you.
And as important as insurance is,
yeah, it's good line of defense,
but it's not the end-all be-all.
It seems that they always try to find some sort of exception to not pay
when you actually go to file a claim.
So have insurance just in case, but don't rely on it.
Another thing worth looking into is homestead exemptions.
These protect homeowners from creditor claims against their primary residence,
but still everything else is up for grabs.
Two best states for homestead exemptions are Texas and Florida.
States like California, Arizona, New York,
well, it varies on how much of your property value is exempt for homeowners.
That's specifically for those who file bankruptcy.
In these situations,
as long as the value of your house doesn't exceed the limit for the state,
when you go bankrupt,
you still keep your home.
If you have a qualified retirement account,
like let's say a 401(k),
these are protected from creditors.
That's great and all, but that's just your retirement fund.
What about everything else?
At this point, I'm sure you're wondering, "What's the real deal here?"
"What's the best thing I can do to protect myself in these volatile situations?"
This next section is the real meat and potatoes of this video.
Before I really dive into it,
I want to teach you another phrase you'll hear over and over
if you ever talk to an asset protection lawyer.
You can't sue what you can't see.
The best thing you can do in an asset protection strategy,
especially for high net worth individuals,
is to distance yourself from your own assets.
This way, they can't be taken away from you
as long as you have the right safeguards put into place.
There's a lot of different ways you can do this.
So let's look into a few of them from least effective to most effective.
I know everyone wants the most effective strategy.
That's also the most expensive.
So I want to be able to cover what everyone is able to do.
Step one, and the easiest strategy, is gifting.
For 2023, the gift tax limit is $17,000 per recipient,
$34,000 if you're married
because you and your spouse can both gift $17K.
You can gift $17K to this person and that person, etc, etc.
This also isn't just for cash.
This could be for cars, land or anything of value.
If you go over the $17,000 limit,
you have to report that in the 709 form to the IRS.
The excess reported goes into your lifetime exclusion.
Once you exceed your lifetime exclusion, which is $12.92 million,
that's when you have to start paying gift taxes.
Gift rate is 18-40%,
depending on where you are and what you're gifting.
Only the giver has to pay the taxes, never the recipient,
and you have to gift a lot of money to get to that point.
If you're going to use gifting as an asset protection strategy,
you really have to trust who you're gifting your stuff to
because once you do that, it's technically their property.
So be careful.
Why gifting works?
It's because it distances you from your assets.
This is similar to how people will have their car in their mom's name
and their house in their uncle's name and things like that.
This isn't a bad strategy, but it's not the best strategy.
So say you don't want to use gifting,
but you still want to distance yourself from your assets.
First, let's start with what you can do inside America.
Making a limited liability company, or an LLC, is a great place to start
because the holder or members of the LLCs are not personally liable
for any debts the company has.
It's not so much about making an LLC.
It's about where you make the LLC.
Remember the goal here is to distance yourself from your assets.
In most states, if you make an LLC, your name is going to be all over it.
This is why making an LLC in states like Wyoming or Delaware is so important
because these states allow you to make LLCs anonymously.
They don't ask who the manager is or who the member is or anything like that.
Obviously, you can't set this up on your own.
You're going to have to hire a third party to do this for you.
Keep in mind, while your money goes into the LLC,
your property will go into a land trust.
In this situation, you'd use a nominee trust,
which means you would be on the chain of title, but you're not listed as current owner.
The nominee trustee does not have control over the property.
They resign their position.
You would still be in control, but people can't see that,
which is the most important part.
For assets like an expensive car, they will go into personal property trust,
which takes your name off the title to that asset.
So the LLCs, the land trust and all that,
well, that's where you start, but it's not where the road ends
because law enforcement or government agencies still might be able to link it to you.
This is why you need to put your LLC and everything else inside of a confidential trust.
States that allow confidential trusts are Delaware, Wyoming, South Dakota and Nevada.
By putting your LLC inside of a confidential trust,
you're removing your name from all of your assets entirely
by having an appointed trustee.
This completely distances you from your assets because you can't sue through your trustee.
Keep in mind, your trustee, aka someone you really trust,
can be your friend BitBoy,
is in control of the situation.
So you have to make sure you carefully decide
who in your life is going to be behind the wheel of this thing.
And as always, to do anything like this,
make sure to talk to a qualified asset protection lawyer,
and, no, don't really make me your trustee.
That was a joke.
That's how you can make a multilayered asset protection strategy inside of America.
But the highest net worth individuals in the world, the elites of the elite,
well, they'll likely not take this route.
They will have an LLC inside of confidential trust,
but the difference is they will do it in an offshore account.
This is by far the best way to go about this.
The three best countries in the world to create these offshore accounts
are Nevis, Belize and the Cook Islands.
All three of these places have very strong privacy laws,
they have the most robust asset protection laws in the world,
and they're outside of American jurisdiction.
And the real kicker here is they have no income tax,
no inheritance tax and no capital gains tax,
which is why these three places are the ideal situation
to have an asset protection strategy.
This is the most expensive route,
but it's well worth it when you think about someone trying to sue you
for everything you have.
So say you have a valid asset protection strategy in place
and you happen to get sued and you lose in court.
Now, the person who sued you had a judgment against you for say a million dollars.
Guess what?
Your asset protection strategy worked,
your assets are shielded,
and the person that sued you won't be able to collect the judgment,
even if it's outstanding.
The catch here is the person who sued you will still have to pay taxes on that million dollars
even if they didn't get it from you.
How great is that?
That's an unlikely scenario, but that can happen.
It's unlikely because lawyers will usually do their due diligence
before spending a bunch of money on a lawsuit.
Sometimes.
And they will know if you do or do not have a bunch of assets to your name.
That means if you have an effective asset protection strategy,
that will deter them from going after you in the first place.
Here's the thing.
You ever heard of a homeless man getting sued for millions?
No.
That's because people looking to sue target people with money and assets
they can actually take.
You can't draw blood from a stone, am I right?
So listen, before any of this happens,
regardless of the status of your asset protection strategy,
before anyone takes you to court,
you need to push back as hard as you can.
Be as difficult as you can for them to get ahold of.
You're not required by law to pick up the phone.
You're not required by law to respond to an email.
You have to be impossible, even in a clawback situation.
If everyone they're going after simply doesn't cooperate,
it would be a lot harder for them to claw anything back.
Unless they officially serve you and summon you to court,
do not voluntarily put yourself in a position for anyone to screw you over.
But for the sake of argument, here's a scenario.
Say you don't own a home or any assets.
You have a side hustle, but you're technically unemployed.
And you get sued for say $50,000.
If they summon you to court, then you have no choice but to go,
unless you want to make stuff worse.
Unfortunately, you lose the case,
and because you don't have the money,
the plaintiff isn't able to recover the full amount of the judgment from you.
In this case, what's going to happen is they're going to plan for you
to pay the judgment off over time.
The court is going to put a wage garnishment on any job you have.
And they'll put a lien on the assets you acquire in the future.
Depending on your situation, you can be eligible to file for bankruptcy,
which could eliminate or at least reduce how much money you owe them.
All in all, you never want to find yourself in this situation.
Things outside of your control, well, they happen every day,
and you need to be ready for that.
It doesn't matter if you only have $1,000 or if you're a millionaire.
You need to be well informed about asset protection
because there's always someone out there who will try to take it from you.
If you have the money for an offshore account,
that's great.
But for everyone else,
make sure to look into the rules for your specific state.
Talk to a qualified professional.
Before I go here, do your best to remember these two important concepts.
Don't wait till it's too late.
And you can't sue what you can't see.
That's all of me you get to see today.
That's all I got.
Be blessed.
BitBoy out.