In the Harry Potter movies, the cloak of invisibility allowed Harry and his friends to explore their school without being seen. Similarly, the real world offers this to prevent disclosure of your information to public record, which is by simply having an anonymous trust.
With that said, many business owners, celebrities, and even law enforcement officers seek privacy and anonymity to protect their assets and personal lives. But before reaping the benefits of this legal cloak of invisibility, it is crucial to understand the risks and why you should use it to your advantage.
Understanding The Risk
Based on the Clements Worldwide study, Americans, especially those who own real estate, are at the highest risk of being sued. This is also because many are not aware that their personal information is of easy access to plaintiffs. But are you willing to risk all your assets and bet on your future? Investing without asset protection is essentially equivalent to betting. You are either lucky to hit jackpot, or you might just lose it all. So why take the risk? This is how you should go about protecting your assets.
Step 1: Set Up An Anonymous Trust
After doing your research on structures and filing the paperwork for your LLC, the last thing you need to do to protect yourself from a lawsuit is set up an anonymous trust. When done correctly, all the company ownership, as well as personal and business assets will be hidden. But what exactly is an anonymous trust?
It is a type of trust whereby individuals can store assets out of reach from a beneficiary, reducing the chance of one’s actions affecting their own net worth. In this case, your property cannot be seized as the lawyer will not be able to link you to any assets.
Step 2: Make It A Member Of Your LLC
The next step is adding your blind trust as a member of your LLC. This hides the property and weakens the financial aspect of a lawsuit. No assets will be associated with your name, and you protect yourself from future litigations. To make it extra safe, ensure you secure an anonymous LLC. This is because a regular LLC can still cause you to get sued for your assets, but individually. So, take extra precautions by having an anonymous LLC.
Step 3: Reap The Benefits
Setting up an anonymous LLC and trust is what makes up this invisible cloak. Most lawyers work on contingency and negotiate a fee based on the merits of the case from plaintiffs. But if the plaintiff’s lawyer can’t find out the owner of the LLC with anonymous trust members, they would definitely leave the case behind since it could take years.
The Bottom Line
A blind trust is the perfect legal invisible cloak for those who want to separate their financial life and their personal life, lowering the risks of potential lawsuits. But the most important part is finding a reliable trustee. With the right person overseeing your finances, you are in safe hands going into financial stability. So be sure to do your research and protect your assets today!
