hey what's up guys it's clint coons here and in this video i want to talk about the importance of
asset protection for your self-directed ira all right let's get started okay so what inspired
me to want to cut this video right here what has to do with the fact that so many investors
don't understand the importance of asset protection when it comes to investing
inside of a self-directed ira or solo 401 k in fact most investors that i've talked to believe
that the ira or their 401k offers them asset protection so why would you even consider using
some of the same strategies we use to protect your residential real estate or your commercial real
estate with an ira because the ira's protected well nothing can be further from the truth that
is misinformation you're deluding yourself if you don't think your ira can be sued and in fact one
of our clients recently learned this the hard way as you can see here on the screen i'm providing
you a copy of the complaint that they were served with when someone injured themselves on a property
that they own inside of their self-directed ira there was a guest there they're walking
defective stairways and and they hurt themselves when they fell and so now who are they suing
they're suing the iron as you can see on the screen i've blocked out the client's name but it
shows their self-directed ira here because they would serve the ira trustee that actually holds
the account on behalf of it so what does that mean so this individual they had set up a self-directed
ira that set up here here's their ira and they own 10 properties inside of it just like this
and they have cash sitting inside of there now the tenant actually hurt themselves right here
on this one property so what they're doing now is they're suing the ira for recovery and so when you
sue the ira all of its assets are at risk from from that potential lawsuit and so when i talked
to the client i said you know what is going on here he's one of our titanium clients so they can
set up as many llc's as they want i'd created for them several different limited liability companies
for the assets on the outside to protect their properties of course that were inside of there but
when it came to the ira you know what his response was well i just figured that these were protected
that's why i didn't go into this and get entities set up so as you can see from this lawsuit
things like this do happen inside of your ira and if you're an ira investor the way you're
going to go about protecting yourself is setting up separate llc's for each of your properties that
are held by your self-directed ira or solo 401k and so let's assume that this property right here
is in indiana indiana limited liability company ohio llc and on the llc itself you're going to be
the manager your ira will be the member now had this client set up an llc for that particular
property then that lawsuit would not be served on the ira custodian that's holding the account
and title for that client instead it would have been served on the limited liability company
and only the asset inside of that llc would be at risk not these other assets that he holds inside
of his iraq so that's one strategy to protect your ira from these types of lawsuits a second strategy
might be if you're not comfortable setting up llc's let's say someone tells you oh that's a
private transaction which it's not but you're concerned about that then what i
would do is i would create multiple iras so i if i was using that strategy i would have
several different iras set up with only one property in that ira so now in this
scenario what would happen is if you get sued they're going to sue this ira right here
and these other ones since they're separate iras with different account numbers they're not
going to be liable because only this property is titled into this particular ira these are separate
so that's one way you can do it without setting up the llc's but here's the problem with that
as well that you may not be realized let's assume that this injury over here wrongful
death for whatever reason maybe you didn't have a working smoke detector and this person died
right so the family's suing and they're suing you because he happens to be a graduate of mit in
spatial engineering and he generates on average one million dollars a year he was just renting
right now as he as he was uh doing his fellowship or something on the side so he sues this ira
for one million dollars right they come after this llc for the damages of the lost one here
for wrongful death because you didn't have a working smoke detector the value of this house
is 250 and you have no other assets inside of your ira do you think you just go i'm going
to shut the ira down and that lawsuit goes away no you see an ira offers you
asset protection from this standpoint you get sued they can't come and take your ira in 42 states
uh or 44 forget that in about a handful of states eight actually it's eight to ten i believe your
ira is not protected from your personal creditors so when we talk about creditor protection what
we're meaning is you get to say you're in a traffic accident and it's your fault or you
sign a contract and you default on the contract you're being sued under that contract in most
instances they can't touch your ira assets and if your irs held properties they couldn't break into
the ira and get the property itself but it doesn't work the opposite way when the ira gets sued
they can look through the ira and go after the beneficiary nothing's stopping from that the only
the laws as they're written protect the assets from the iris owners creditors not the owner
from the creditors of the ira so again if you're thinking well i'll just do that strategy not use
the llc's you are putting yourself at risk because when you use this strategy if they were suited for
a million dollars here and there's 200 000 in equity they aren't going to go beyond the llc
all i'm going to do is dissolve it out and away goes the remaining portion of that judgment
so you got to be careful on how you go about creating your asset protection for your iowa
assets just make sure this that you're using a plan because it takes a lot of time to build up
the value and as i told this client you know that has 10 properties inside of there he said it took
you several many many years actually to get to this point and by not using the asset protection
now you've just potentially jeopardized your retirement future with those funds
hey guys if you liked the video hit the like button if you want to set up a strategy session to
discuss your situation if you have a retirement account like this be sure to go into the show
notes where we have a link there for you where you can set up a session with an expert that can
discuss with you how to create the best plan for your individualized investing situation take care
you