This Attorney Protected $11 Billion — Here's What Every Entrepreneur Gets Wrong | Hillel Presser

What is up, The Entrepreneur DNA family? Welcome back. And as always, these shows are brought to you by The Entrepreneur DNA Club. If you wanna get access with individuals like I have on today, so you know how to protect your assets, you need to make sure you go to theentrepreneurdna.com. Be a part of this club, because this guest is gonna be on there. All right, we have Hillel Presser here. He has 11 billion in assets protected. He's written six books. You've worked with pretty much every celebrity athlete that we all can think of to protect them because they make a lot of money and they have a lot of assets. That's why we're all here. Let's go make a lot of money. So everyone should know. Hillel Presser. Thank you for having me. It's not what you make. It's what you keep. That's right. Well, and I've had to learn that the hard way in recent years. So let's talk a little bit about that part. What do the rich do when thinking how to protect what they've already built? Sure. So we live, obviously, in a very litigious, frivolous society where one lawsuit, you can work everything you worked your entire life for. And it doesn't even have to be something that you do wrong. Maybe your employee does something wrong. Or maybe your child drives your car and gets in a car accident, and you get sued because you own the car. So what the ultra wealthy are doing is they want to make sure that they become uncollectible and judgment proof. They're taking their chips off the table so they never need to start over. So how do you do that? Let's rewind. Before they're rich and famous, if you have the chance to sit down with them knowing they're going to go get a $100 million contract, whatever the case be, how would you suggest them to set up their business, their life from the beginning? Yeah, so the main thing that they should do is really to own nothing and control everything. So if you own something, a brokerage account, a piece of real estate, shares in a company, well, if you get sued, you can lose it. So you want to own nothing and control everything. But also, it's not just for the wealthy. If you have a half a million dollars saved up and you get sued for a million dollars, that's catastrophic. There's no coming back from that. You know, if you have $40 million and you get sued for $5 million, you know, you're not happy, but, you know, you still have a lot left. Yeah. And so the setup structure of these type of things, whether you're a business owner or just maybe, and I would have made an argument, all your famous athletes are business owners, right? They have a huge amount of income coming in. How do you want to set someone up knowing they have a trajectory to do something big? So there's so many different strategies. My favorite strategy is to use protective entities. So protective entities are things like LLCs, limited partnerships, different types of trusts. And just like you and I are different people with different social security numbers, you know, if I get sued, they can't come after you. If you get sued, they can't come after me. Well, if you have a protective entity like an LLC, that LLC has a tax ID number. And if you get sued, they can't come after your tax ID. Excuse me. They can't come after your LLC. And if the LLC gets sued, they can't come after you. So one really great strategy is take all your assets, take them out of your name where they're totally unprotected, and title them all to protective entities. Now, I know you're not a lender, but the first thing when you say that that goes through my head is, let's say my home goes into a trust, and I'm like, oh, well, I have a million dollars in equity. I want to pull a HELOC. How do you then go to a bank? Do you know that answer? Sure. Yeah. So how do you go to a bank and pull a million out of your home now that it's in a trust and not on me? Yeah, it's easy. It's no problem at all. You just need to educate the bank. So in your example, if you take your house and put it in a trust and you have a million in equity, when you go to that bank, you just have to be very clear to them and let them know, look, my home is titled to the trust. So what a smart bank will do is a smart bank will say, listen, I want you to sign a personal guarantee, but I also want the trust to sign the guarantee. And if the trust signs the guarantee, the bank's not in any worse position. Yeah, it's all the same. Because like you said, the trust would have a social security number and I have a social, right? It's the same idea. Yeah, and you have to be careful with trusts. I say that because probably the biggest misconception that I see every single day, not a day goes by where I don't see it, is someone will walk into my office and they will have a revocable living trust. And if you don't know what type of trust you have, it's probably a revocable living trust. You know, 98% of the trusts that people have are revocable living trusts. and those trusts give you zero asset protection. So they don't do one thing for you while you're alive. They're great tools to have. I think everybody should have them because when you die, they provide a lot of benefit, but they give you no protection while you're alive. And for some reason, I don't know if the attorneys don't explain them properly or the clients misunderstand them, but a client thinks when they have this revocable living trust that they're protected, but they're not protected even 1%. So let's just go into that. What's the difference between an irrevocable trust and a revocable trust? Sure. So with the revocable trust, it's pretty straightforward. If you put an asset in, you could take it out at any time. So if you put money or real estate or a business in a revocable trust and you get sued, because you have the ability to take it out, the judge orders you to take it out and you lose everything. So the revocable living trust gives you zero asset protection. The irrevocable trust, on the other hand, gives you tons of asset protection, but think about why. It gives you asset protection because you're irrevocably giving something away. So, of course, you're protected because it's not yours anymore. And I remember the story. I had a husband and wife come into my office, and 10, 20 years ago, they'd given everything they had to an irrevocable trust for their kids. They were worth maybe $30, $40 million. Well, the husband and wife ran out of money. They asked the kids for a loan, and the kids told them to screw off. So, yeah, it was protected, but it's irrevocable, and you're not getting that back. So I love irrevocable trusts. I tell my wife if I was a jeweler, she'd have a lot of jewelry. I'm a lawyer, so she has a lot of paper. I have about 13 trusts. But just be careful what you put in an irrevocable trust. What would be something you wouldn't want to put in an irrevocable trust? Anything that you would potentially need to live on. So, you know, if you have lots of money or lots of assets and you want to irrevocably give something away to the kids or the grandkids, no problem. Do it. But just understand whatever you put in there, you're not getting back. Now, with that being said, there's always ways around it. So, you know, one strategy that you could do if you still want to utilize revocable trusts is take a couple that's worth $10 million and you could pick any number. Well, the husband can set up an irrevocable trust for the wife and put $5 million in there. for the benefit of the wife followed by the kids. The wife can then take the other $5 million in assets, put it in an irrevocable trust for the husband followed by the kids. Now you have two irrevocable trusts that are totally asset protected and that will grow totally estate tax-free, but the husband can access $5 million, the wife can access $5 million, and together they can access the full amount. So you can use irrevocable trusts without losing control. Again, now if you have a prenup or a postnup, you may not want to do that, but definitely something to consider. Would you ever want to put a business in an irrevocable trust? You know the lawyer's favorite answer, which is it depends. There's a lot of great things about putting a business in an irrevocable trust. It'll be asset protected, and more importantly, it can grow estate tax-free. So I love that. However, if you really need the cash flow to live off from the business, you've got to be careful. and also you need to make sure who the beneficiary is. I gave a speech the other day and she was telling me how her business was put in an irrevocable trust. Well, because she set up the irrevocable trust, the beneficiaries were her husband and her kids. She can't access the money. Only her husband and kids can, which is not what she thought she was getting into. So I love it, but just got to cross the T's and dot the I's. Now, is there a way to unwind the irrevocable? So for example, can she come to you and say, hey, can you get me out of this? I need my business to be able to pay me. Can you unwind it? So again, it depends. And I'm not trying to be funny. I mean, that's unfortunately the answer a lot in law. So an irrevocable trust is irrevocable, but that doesn't mean that there aren't things you can change. And it's called decanting. So with an irrevocable trust- I only decant wine. Sounds much better, even at this time. But, you know, so with an irrevocable trust, you can change something. So, for example, you may put an apartment building in the irrevocable trust and maybe it's worth a million dollars. Well, maybe you want that apartment building out. Well, you can transfer a million dollars in and take the apartment building out or maybe even a note. So you may be able to switch the assets that are in the trust. But just depending on where you live, because it is state law and things of that nature, there's some things you could change. There's other things you can't. Yeah. So how does it work? Can you lend into it or take income out of it? I want to go into the tax side of this whole thing. How do you play the right game with an irrevocable trust, income-wise, taxability, tax savings? What does that look like? So the best things to put in an irrevocable trust are things that you believe will truly appreciate and value. And the reason why they're the best is you can get them outside of your taxable estate. So, you know, if you have a million-dollar painting that you think is going to grow to $20 million, well, if that was inside of your taxable estate, that could be $10 million in taxes. But if you put that million-dollar painting in the irrevocable trust and then it grows to $20 million, there's zero estate tax. No different with a business. Maybe you buy into a startup that really has no value, but you think it's going to be worth $20 million, $50 million, $200 million. That's a great thing to put into an irrevocable trust because you think it will truly appreciate. So I love putting assets in there that I think are going to truly appreciate. Now, on the other hand, I probably wouldn't put something in there where I needed the cash flow to survive because it's tougher to take it out. And it doesn't mean you can't take it out. It just becomes more difficult. Well, what's the one thing the non-rich and famous need to know about a revocable trust or irrevocable at the beginning of their journey? So the great thing about a revocable trust, although it doesn't protect your assets while you're alive, in fact, it does nothing while you're alive, it's a great tool for when you die. Because here's what happens. If you die, and let's just say you have a will but no revocable trust, well, when you die, it'll take months if not years for your assets to get where you want them to go. Everything will be totally public record. Everybody will know exactly what you died with, and the attorneys will take a percentage of what you died with, usually about 4%. So if you die with $10 million, that's a $400,000 legal fee. Now, if you use a revocable trust, now when you pass away, your assets go exactly where you want them to go very, very quickly, totally private so nobody knows what you died with. And there's no 4% plus or minus percentage. You may pay lawyers per hour, but it will never equate to that 4%. So I love a revocable trust, but just understand it's not for asset protection planning while you're alive. It's for estate planning when you die. Yeah. Yeah. And people need to understand that. What do you see is the biggest aha moment when someone comes to you, they've made their money and you teach them that thing. What is that thing that more often than not, the rich people who have made it go, oh, my God, Hillel, thank you. Yeah, I think it's really just knowing the strategies are out there. So a lot of people don't know, unfortunately, until it's too late, that there are ways to make yourself, you know, uncollectible and judgment proof, you know, so no one can take what you've worked so hard for. Also, a lot of times people don't know that there are a lot of legal and ethical tax strategies where you could save millions, if not tens of millions or hundreds of millions of dollars. So just the mere fact that those things exist, a lot of times, unfortunately, people find that out way too late. The world's, we kind of joked about this, the world's a litigious place these days. You can literally sue someone because you don't like the color of their shirts. Insane. What can people do today to start even before hiring a lawyer before calling hello what can they do today to start to protect themselves Educate yourself Just know that there's steps you could take. I've written several books on asset protection. I'm happy to. Yeah, when can they get those? Can they get Amazon? Yeah, they can. But honestly, if they come to our website, it's www.assetprotectionattorneys.com. If they mention your show, I'll send them complimentary copies. That's awesome. It's our mission to educate, and the stats are crazy. There's over 100 million lawsuits every single year. That number is only growing. 100 million lawsuits? You are seven times more likely to face a lawsuit than get into a car accident. And if that doesn't scare you, I don't know what does. Wow. That is a staggering number. I have never thought about it, but that number is massive. One in four chance you and the business get sued in the next 12 months. Average person and business gets sued five times over their lifetime. And there's a 50% chance of divorce. But I joke when I'm in Miami, I say there's a 99.9% chance of divorce. OK, so now now again, there's a lot of fear mongering going on. That's the world. Social media is whatever. Right. It's very click happy and whatever they call it. But you just gave us real stats about 100 million lawsuits. So everyone going into business at some level should expect a lawsuit. Think about it. Lawsuits are the next biggest business. I mean, there's lawyers and they get together and they say, who are we suing next? Is it the business owners because they don't have the ramps outside for ADA? The biggest lawsuit I see now, people are suing business owners because their website is not ADA compliant. So they send them a letter and they say, you have one week to settle for $25,000. and if you don't, we'll sue you. And they know it'll cost them hundreds of thousands of dollars to defend themselves even if they win because their website is not ADA compliant. Go into what does ADA compliant mean? So for the American Disabilities Act, just like if you have a restaurant, you may need to have a ramp or in certain buildings you may need to have an elevator. Well, it's the same thing as the ramp or the elevator but for the digital age. Wow. So is your font big enough? Are you showing the right graphics for the people with disabilities on your website? And there's lawyers out there just throwing a letter saying, pay us to not sue you, essentially. Think about it. Is that not extortion? It's a very heavy border of extortion. But, I mean, think about this, right? You look at me wrong. I sue you for intentional infliction of emotional distress. I sue you for $100 million. And I could do that for free because I'll find someone within a mile of here who will take the case for free on a contingency fee basis. You now have two choices. Choice number one, you don't defend the case. If you don't defend the case, I get an automatic $100 million judgment against you. If you defend the case, it'll take you two, three, four years, hundreds of thousands of dollars, if not millions. And even when you beat me, I am not responsible to pay your lawyer's fees. So how does the average person today, business owner, start to protect themselves from that? Yeah. You need to make yourself an unattractive candidate for a lawsuit. So before a lawyer sues you, the first thing they do is look you up. And they say, are you a candidate for a lawsuit? I don't want to be. I want all my assets to be protected. So what we do is instead of creating a doubt as to liability, hey, are you going to win the case? Am I going to win the case? We create a doubt as to collectability. We can go to the other lawyer and say, listen, you may win, we may win. But even if you win, which we don't think you will, our client is uncollectible. They're not the low-hanging fruit. Half the time, they don't want to sue our clients. I helped settle a $20 million lawsuit for $250,000. I helped settle a $5 million judgment for $500,000. The only reason I was able to do that is I was able to convince the other side that there was no pot of gold at the end of the rainbow. That's huge, right? Talk to me about personal guarantees. Would you ever sign a personal guarantee? I could sign a personal guarantee all day, every day because I'm uncollectible. Yeah. I still try not to, but I could. Yeah. And to some extent, I think with banks and whatnot. But any other reason you would? I mean, I just, now that I know what I know going through my experiences, I think there's a world where I would never sign one ever again. Even if I come to you and become your client, get me protected. I'm like, I don't want to personally guarantee this. Yeah, you never want to be on the hook personally. Because even if you're uncollectible, they can still get a judgment against you. Correct. And if they get a judgment against you, it's out there forever until you negotiate it away, pretty much. So to the extent you don't need to sign a personal guarantee, I would do anything that you can to avoid that. So, for example, if you're renting a piece of real estate, well, instead of signing the personal guarantee, tell them, hey, we'll give you a little bit more as a down payment. We'll give you more up front. Or, hey, I'll pay six months of the lease up front or whatever it is. But anything you can do so you don't have to sign that personal guarantee. Yeah. What do you want the general public to know is most important beyond getting informed? But what would be most important for them to start thinking the right way, right? You know, it's really important to me that the audience understands whether it's real estate they're acquiring, whether it's just what they've been inherited, like all the different things. What's the first thing that you want them to start to think is the first step, the second step, the third step? Yeah. So first step is really just educate yourself and know that solutions exist. Step number two is inventory your wealth. Everybody has way more than they think they do. When I talk to someone about what their assets are, they always say real estate, money, business. But there's so much more. What about an inheritance? Did you loan somebody money? If your daughter owes you $200,000, that's an asset. And if a creditor takes that, they can harass your daughter. What about crypto? What about intellectual property like patents, trademarks, domain names? So after you've educated yourself, you want to inventory what you have because you probably have a lot more than you think you do. and after that you can start protecting yourself. And that's when you want to own nothing and control everything. And it's very straightforward to think about. If you own an asset, you can lose it. If you own an asset, you can lose it. So if you have a brokerage account and you get sued, you can lose it. If you own real estate and you get sued, you can lose it. If you own shares in an S-Corp or a C-Corp and you get sued, you can lose it. So you want to get those assets out of your name where they're unprotected and get them inside of some sort of protective entity like an LLC, like a limited partnership, like a proper trust where no one can take it. My favorite subject, real estate. Let's talk about that for a second. Love it. Should all your real estate be going into an irrevocable trust? If you're going to liquidate something, you know you have a five-year run. I'll make this up. You bought an apartment building. You know you're going to sell in five years. That's the exit plan, right? You're going to add some value, then sell. But then you might 1031 and do another one. What do you do in these scenarios where there's likely more of an exit than the long-term, lifelong type thing? Yeah, so I love real estate. I buy as much real estate as I can. And I think the most important first step with real estate is protective entities, LLCs. So, for example, and I'm not talking about the primary home because there's some different tax issues there. We can talk about that later. But if you're buying an Airbnb, an office building, an investment property, a rental, a vacation home, anything, anytime you buy that property, you want to buy it in an LLC. And you do that for two reasons. If you buy a duplex to rent out for a million dollars and you get sued, you can lose that million dollar duplex. But if instead you buy that million-dollar duplex inside of an LLC, you don't own the duplex. The LLC owns it. So if you get sued, you can't lose it. Worse than that, people are like, what's worse than losing a million dollars? Worse than that is if you own that million-dollar duplex in your name and somebody gets injured on the property, they can sue you and come after all your real estate, your businesses, your money, anything that you own. If instead that real estate, that million dollar duplex is owned by an LLC, now if someone gets injured, they can only sue the LLC and not you personally. So the two reasons we always put real estate in LLCs is number one, we don't want you to lose the property if you get sued. And number two, if there's an injury on the property, I don't want you being sued personally. Now who manages the LLC? Is it you or is it an S corp or how would you structure the management? Again, it depends. You can manage it yourself, which is totally fine. You can be the manager. The manager, just because you're managing, it doesn't break that corporate liability. Or some people, depending on how many properties they have, they may create another entity, another LLC to be a real estate management company. Yeah. Yeah. Okay. So if you're going to exit, that's the easiest structure. Now, let's say you're going to go buy your trophy property that you know you're not going to want to exit. Are you structuring it the same way with the LLC or do you buy into a trust? Do you start a trust to buy it that way? How do you handle that? So the LLC is always going to be the first step, but it's kind of like buying a car. You can upgrade. You can get a better stereo system. You can get bigger tires. You can have it lifted. It never ends. So step one for real estate is an LLC, but who owns that LLC? Maybe we want that LLC owned by a holding company like a limited partnership. And then who owns that limited partnership? Well, maybe we want to discount it for tax purposes and also have it grow estate tax-free, so maybe we have that limited partnership owned by an irrevocable trust. So LLC is always going to be your first layer, and then you can keep adding on and adding on, like holding companies and irrevocable trust to get it out of your estate. One of the things that I focused on is, like I said, it's not what you make, it's what you keep. So what I've tried to do is I've tried to take as much of my assets as possible and get them not only asset protected but outside of my taxable estate. Do you personally put everything in irrevocable trust? Not everything but the majority. So I probably have – and I'm just guessing maybe 70, 80, 90 percent of my assets outside the taxable estate in an irrevocable trust. Again, I have multiple irrevocable trusts. But there's some things just for ease that you don't put in the irrevocable trust. And then there's also things like I own a nationwide law practice. Well, by law, my law practice has to be owned by me because it has to be owned by an attorney. So I can't take my law practice and put it in an irrevocable trust. So there are some things that are outside of the irrevocable trust, but the majority of it is inside because, look, we pay taxes when we make money. We pay taxes when we buy things. We pay taxes when we spend money. We pay taxes when we invest the money we've made. I'm trying my best to pay as little taxes as possible that are, of course, legally and ethically possible when I die and pass it on to the next generation. No, there's so much to be said there. Now, is there any world that income, business-driven income, would you structure it any other way? I mean, having assets means you brought in enough money to go get the asset. How can you structure any level of that creatively? Is there a creative option for high-income earners? You know, there are things, but there's not a ton of them. And, you know, advisors or promoters come out with things all the time, which you have to be very careful about because, you know, you get involved in some sort of, I don't want to call it a tax scheme or tax strategy, and then, you know, the cover-up's worse than the crime. Yeah. So when the IRS comes back and now they hit you with penalties and fees, you would have been just better off paying taxes. That's right. So there are legal and ethical things you can do. One that I'm sure a lot of the real estate listeners know is the depreciation. So if you buy as much real estate as you can, you can depreciate the property. You can expedite the depreciation by doing cost segregation studies, and then that can go against either your passive or non-passive income. It just depends on a lot of different factors. So there are things that are legal and ethical but you have to be very careful about what these promoters are promoting because if it sounds too good to be true it probably is And I can tell you how many times I seen people invest in these quote tax strategies and they end up being in a worse place than where they would have been if they just paid the taxes. Yeah. Let's go to crypto. Can you do anything with crypto or your stock account? Absolutely. So crypto and stock account, both are somewhat liquid assets. And if you get sued, they're going to depose you under oath. They're going to have you fill out a financial affidavit. And they're going to say, how much do you have in your brokerage account? They're going to say, how much do you have in crypto? And they're going to find out. It's like the people who 40 years ago thought no one was going to find out about the Swiss bank accounts. They're going to find out about your crypto. So you always want to be honest. You always want to be legal. You always want to be ethical. And if you're proactive and you protect it properly, you can tell everybody what you have and where it is. They just can't get to it. So something like a brokerage account or something like crypto, if you keep it in your personal name or your revocable living trust, if you get sued, you lose it all. But if instead, if you take that brokerage account or you take that crypto and you transfer it to a protective entity, then you don't own it. Nobody can touch it. So the protective entity, and again, there's no one size fits all. Everybody in different states has different things. But I love a limited partnership for a holding company. So instead of having a million-dollar brokerage account or a million-dollar crypto account titled to you where you can lose it, you can have your million-dollar brokerage account or your million-dollar crypto account titled to your limited partnership. Now if someone sues you, it's not yours to lose, and you can keep that million dollars. That's really smart. That's not even talking about anything, putting anything in a trust. It's literally just removing your name from your brokerage account or your crypto account. Yeah. So I don't keep much money in my personal name. I only keep enough in there to pay some bills. And when it runs down, I put a little bit more in there. Because anything that's in my personal checking or savings account, anything that's in my, you know, revocable trust account, if I get sued, I can lose. So if I have a brokerage account, which I'm looking at as investments or savings, not day to day expenses, that'll never be in my name. It'll be in a limited partnership holding company. And again, every state's different. So some people may use a limited partnership. Others may use an LLC. And that has nothing to do with the trust. Now, you could still integrate the trust. So this is where you kind of take asset protection and estate planning and you put it together. With a proper structure, you want to make sure while you're alive, everything's protected. And then when you pass away, you want to make sure that it goes where you want it to go quickly, privately, less taxes and less lawyer fees. So if you have these brokerage accounts, stock or crypto, and you use asset protection and estate, you'd probably only want to do it if you're not going to pull the money, correct? Well, you can pull the money. I tell people it's like a safety deposit box. So a safety deposit box, you can go to all day, every day, three times a day. But how often do you really go there? You usually go once a year, once a quarter. So it's left pocket to right pocket. You could put money in your limited partnership. You could take money out of your limited partnership. You can do it as little or as much as you want. But I tell people, you know, you should do it maybe, you know, once a quarter, things of that nature. But if you ever need money, you could take it out. It's not irrevocable. And if you ever have extra money, you can put it in. Yeah. So you wouldn't ever if someone was thinking they were going to liquidate over time, you stay away from putting anything in the irrevocable trust because it's irrevocable. Yeah. If they if they need it. Yeah. And I'm understanding there's ways go around. Right. Notes and loans that you can do into an irrevocable trust. But I think if anyone's going to need the money, need the asset, need whatever while living. It doesn't make sense. Yeah, and I agree, and think about why. When you put an asset in an irrevocable trust, it's irrevocable. Right, by definition. But if you take it out, why did you put it in there in the first place? So again, I'm not saying that you shouldn't have ways to access assets in the irrevocable trust. You should in case you need them, but the goal shouldn't be to put that type of stuff in there. You should be putting things in there with the mindset of this is long-term. These are things I want to pass down from generation to generation. Is your business national or international? Yeah, we do both international. We do both domestic and international work. So we have clients in almost every single state and different countries as well. So that sounds like only for billionaires, right? International asset protection. Only billionaires get access. What is the thing that people need to know, the more common person needs to know about what you do and the value of it? Yeah, so look, there's domestic asset protection and there's international asset protection. You know, some people need domestic, some people need international, and some people need a combination of the two. I love domestic asset protection when it comes to things like domestic assets, like real estate, businesses. You know, I can't take your house and fly it to Nevis or Belize or the Cook Islands, although that may be fun. I love international asset protection when you're protecting liquid assets. That's when I really see the value of international asset protection. So if someone had a huge liquidation event, maybe they sold their business, maybe they sold their real estate portfolio, whatever it may be, if they have a lot of liquid assets, I love international asset protection. But if they're hard U.S. domiciled-based assets, I'm okay with domestic asset protection. And it's pretty crazy. I talked about selling your business. The biggest lawsuit I see, and I'm not talking about car accidents and stuff like that, is when someone sells their business. And people always look at me like I'm crazy because they're like, I just owned a business for 30, 40 years, and now I don't have liability. I sold my business. Well, here's what happens. 74% of business transactions either fail to materialize or they end in litigation. And the reason why that happens is think about it. 55% of U.S. companies lose a bare minimum of 40% of gross revenues with ownership transition. So you sell your business to John Smith. Nobody ever runs your business like you. Income goes down, expenses go up, and then a year or two later, the buyer, John Smith, is trying to sue you to claw back the money. I call it renegotiation. Yeah, yeah. Yeah. And so in that sense, even to your point, what would someone, big liquidity event, they feel like they're not liable for anything anymore, but they have, we'll make it up, $100 million now sitting in the bank. What would you tell that person to immediately go to? Immediately have an asset protection plan. I would have probably a domestic asset protection plan, a holding company like a limited partnership. I would also have an international asset protection plan, whether it be a personal international asset protection trust, whether it be a foreign LLC. And that's for asset protection planning. And they may also want to consider some tax planning like irrevocable trusts so that money grows estate tax free. And let me be clear. This is not just for the $100 million guy. This is for the everyday hardworking individual because $100 million guy gets sued for $10 million. He still has $90 million. You know, the $1 or $2 million guy, they get sued for $5 million. They're wiped out. Yeah. Yeah. So can anyone work with you in your firm? Yeah. We don't have any minimums whatsoever. I'll help anyone, even if I lose money. So if you kind of look at our bell curve, you know, on the bottom 10%, you know, we have the school teachers who saved up a couple hundred thousand dollars, the retirees who saved up a half a million, $800,000, a million dollars. You know, that's probably the lower 10%. If you look at the top 10%, those are the billionaires, those are the professional athletes, the celebrities. But if you look at our 80%, our average client that we help, it's the business owner. It's the high net worth business owner. But I don't care how little or how much someone has. It's very important, and they deserve to be protected. Yeah, I joked, and not really, because it is such a litigious world these days. And if you go out there with any level, to your point, you mean the teacher who saved up $100,000, which is going to take a long time, protect it. Put it in a way that you protect it. And there's ways to protect it that they can still use it and they can give it away, right? To your point, whether it's an LP, a limited partnership or whatnot, you can still use it. It's still there for you. And there's lots of free options. Like, you know, everyone doesn't need to go spend a lot of money protecting themselves. There's so many things you could do that don't cost you any money. So I'll give you a few examples. Every state has different exemptions. Exemptions just mean what is protected in your state. You don't need to do anything. So, for example, in Florida, your house is protected. You can have a million-dollar house. You can have a $50 million house. If you get sued, nobody could take it. In Florida, your retirement accounts are protected. Your life insurance is protected. Your annuities are protected. So if you're a Florida resident, and I'm just giving you one example, you don't even need to call someone like me. You can take anything that you own. Maybe you're worth a half a million dollars. Maybe you're worth $50 million. And if it's invested in your primary home, your life insurance, your retirement accounts, and your annuities, nobody can touch that money. And there's lots of other strategies that, again, don't cost a penny. There's something that's called tenancy by entirety. It exists in about half the states. and it's only for married couples, only for living couples. So can't use it if you're divorced, can't use it if one spouse dies. But what tenancy by entirety says is that the assets of both spouses are not subject to the creditors of one spouse. So if you think about it, super simple example, husband has $100,000 in his account, wife has $100,000 in her account. Husband gets sued, loses the $100,000. Wife gets sued, loses the $100,000. If the husband and wife would have took the $100,000 each and put it in one account, so now you have one account with $200,000, and if they labeled it tenancy by entirety, now if the husband gets sued, can't take a penny. If the wife gets sued, can't take a penny. Someone can only even try and go after that money if both the husband and wife are sued, which normally doesn't happen. So there's tons of other strategies that you can use that don't cost you anything. Where were you two years ago? I want to make sure I fully understand this tenancy in entirety. Yeah, TBE, tenancy by entirety. If me and my wife have a bank account, and in my family, I'm the income earner. She stays at home, and she does a much harder job by far. Believe me, I know. I am married to a great, beautiful woman, the best mother in the world, and she tells me every day. She's here, by the way, everybody. She's here. He's getting brownie points. And she is amazing. And so if I go and make the $100,000 example, I made it though, right? But I choose to put it in this checking account that is the tenancy in by entirety or in entirety that has her name on it. Both of your names. Both of our names. I get sued because I walked across the street wrong and they want the $100,000. They can't get it. Correct. It's as simple as that. Yeah. And it's not as simple as that because you're going to go to the bank and you're going to say, I want a tenancy by entirety account. And they're going to look at you like you're an alien. Okay? And you're going to say, you know, me and my wife. And they're going to say, oh, we'll put you and your wife on the account. Joint. No, no, no. It's got to say, you know, I'm just making this up. John and Mary Smith, comma, husband and wife, comma, tenancy by entirety. It has to say it. Correct. And there's some law that says, hey, maybe you own a piece of real estate. And if both your names on there, it may default to that. I don't like May Default. I don't like gray. I want to know that my assets are protected black and white. And there's other things, right? Like we talked about exemptions. We talked about tenancy by entirety. But let me tell you what also is a really cool strategy. Liens, mortgages, and encumbrances. It is cool to be poor. Poverty is power. What's a million-dollar house worth if you owe $950,000? What a Mercedes worth if you owe There ways to put enforceable liens mortgages and encumbrances on your assets So when people go to look you up you may own a million dollar house, but there's only $50,000 in equity. Right. And they can't force you to sell for 50 grand. And if they do, whoever's first in line gets paid first. Yeah. Wow. That was a real simple fix. wouldn't every business owner to some extent want to do that the tenant because it's so simple to your point you don't need to go hire Hillel although everyone should make sure you go to his website uh you and I just talked about how many lawsuits come out for crazy reasons I looked at you wrong you want to sue me for emotional damage blah blah okay fine but you won't be able to get any of my money because I have it in this bank account wouldn't every business owner want that Not necessarily, and I'll tell you why. Okay. Two things. First of all, I like tenancy by entirety more as an add-on. Okay. So, for example, I like to layer. I want as many firewalls and speed bumps in front of my creditors and my assets as possible. I want belt and suspenders. So, when I have a really high net worth business owner, I'm not just using tenancy by entirety. That may just be one of the few things that I use. Now, if someone comes in and they have $50,000 in the bank, absolutely. Use tenancy by entirety. But a way that you wouldn't want to use it is if you're purposely trying to keep assets separate. So maybe you're on your third marriage and you have a prenup or a postnup. If you take an asset, like in our example, the bank account, and you commingle it and make it tenancy by entirety, well, now you've brought the asset together. That's right. So I joke and I tease, if you have a long-term good marriage, absolutely, I think you should do it. But if you're purposely specifically trying to keep assets separate, that's one time you wouldn't want to use tenancy by entirety. You may or may not know this, but I'm going to ask. If you are in a lawsuit and decide to do some of these tactics, does it not really count because they're going to say, well, here's what you're trying to do, so we're going to go unwind that, I would assume? It's a great question. So what you're referring to is a potential fraudulent transfer. And what a fraudulent transfer is, the definition is you have a present or potential creditor. You transfer assets out of your name for less than fair market value. And as a result, the creditor doesn't get paid. So that's the definition of a fraudulent transfer. Now, present or potential, if there's a lawsuit, we know you're being sued. But if there's no lawsuit, did you have some liability that maybe you'll be sued in the future? Who knows? Yeah. There is case law in Florida that says you don't need to stand there like a deer in headlights. Because think about it. It may be a frivolous lawsuit. I may be suing you for looking at me wrong. Well, you should still be able to protect yourself. So even if you're being sued, you can go do all the asset protection strategies and get yourself protected. Now, if you lose the lawsuit, the person who won the lawsuit will now find out that you're uncollectible. Yeah. They then have the ability to file another lawsuit, a totally new lawsuit, which is called a fraudulent transfer lawsuit. It sounds way worse than it is. Like in Florida, it's a civil issue. It's not a criminal issue. And that person can try and sue you to unwind what you did. So you can protect yourself while you're being sued. They can potentially try and unwind what you did. But here's the neat thing. Although a fraudulent transfer lawsuit is possible, it's not probable. If I told you that I saw fraudulent transfer lawsuits less than 10% of the time, I'd probably be overstating it. So if you're in Florida and you're being sued, I would absolutely go protect my assets. It doesn't mean you're going to be 100% protected, but if we could take you from being 0% to 80% or 90% protection, if we can put you in a position where you can negotiate for 10 20 30 cents on the dollar that's a win absolutely i think you know again i keep going back to all these you know you're a lawyer right but it's just wild in being in business and being in real estate how many times i'm in conversations with like contractor sued me you know lender sued me and it's just like golly like is it all worth it like sometimes i joke i'm like i want to be tom cruise in cocktails no brains i think we all want to be tom cruise by the way like maybe i don't have any money but i'm on the beach doing nothing i have no headaches you know what i mean it because of all what we're talking about i mean your entire business is built on the fact that it's so easy to just come after someone like the joke of looking at someone wrong sues for emotional damage. You're like, I mean, you know, I've seen crazy lawsuits. I mean, I saw the, the wedding couple that sued a photographer for pictures that didn't come out right. 4,000 as a refund, but 48,000 to restage the entire wedding. I saw the man who divorced his wife and sued her because she had an ugly baby. I think she, I think he won $120,000. She said she was naturally beautiful. She had a half a dozen plastic surgeries. It was fraud, But here's the thing. There's things you can do to avoid that so you can go into business stress-free. And I get it, right? It's all about growth, growth, growth, acquire, acquire, acquire. But here's the challenge I give every one of my clients. For every 60 minutes you spend making money, stop. Spend 60 seconds thinking about how to protect it. I think this will lead to that next question I was going to ask, which is what is the biggest mistake business owners are making and they don't even know they're making? Not protecting themselves. Yeah. And, you know, it's like and I don't care how small your business is. Right. I see the clients all the time. They're like, oh, my wife has a Amazon business. She sells ten thousand dollars a year of clothes. You know, it's not, you know, the amount of money the business creates. It's the liability. Yeah. I had a partner. I had a mentor. He unfortunately passed away a very long time ago. And I'll never forget the story. He told me about this little old lady who came in and she was selling dolls at the flea market. And my partner said to her, look, you need an LLC. And she's like, I sell dolls at the flea market. Well, you know what happened? The doll poked out the eye of an infant and she got sued for $3 million. She was in her mid to late eighties. If she had an LLC, they only would have been able to sue the LLC and get a few dollars. But because she was operating out of her personal name, she got sued for three to four million. That's a real story. Real story. A hundred percent. I saw. You must see so many crazy. I see the golf cart that tips over. Someone loses an arm and it's an eight million dollar lawsuit. Golf cart, not protected on your car insurance, not protected on your home insurance. It needs to be in an LLC with its own insurance policy. I have a golf cart. It's in toys LLC, and I pay $130 a year for its own insurance policy. I see the jet ski or the boat that runs over the snorkeler, $10 million lawsuit. So I don't care if you have a $5,000 golf cart. I don't care if you have a $10,000 boat. I don't care if you have an $8,000 jet ski. If those assets are in your name and there's an accident, you get sued personally while your friend or family member is driving. All of those need to be in an LLC. Not because I'm worried about protecting the value of the asset. It's $5,000 or $8,000 or $10,000. I don't care. I'm worried about protecting you from the liability that that golf cart or jet ski or boat could cause. Now, the only thing that separates the reason you didn't say car is because you have insurance on your car and so that there's your protection. It's not even that. You know, if there's ever a lawsuit, there's two people who get sued, the owner and the driver. So if you're driving your car, it doesn't matter if it's in an LLC, you're getting sued anyways. So if you have a car that you drive 80, 90 percent of the time, just throw it in your name. Look, if you get in a car accident, even if it was in an LLC, you'd be sued anyways. But when we talk about assets like boats, jet skis, golf carts, people let other people drive them all the time. Hey, take my boat out. The kids take the golf cart. Hey, take the jet ski. So because so many other people are driving those types of toys, I always like them in LLCs. What's one thing you would help the youth with right now? Start early. You know, it is never too early to start. People think that they need to wait until they're rich and successful. People come to my office after being in business for 20, 30, 40 years. Yeah, it costs a lot of money. It takes a lot of time because I need to fix everything they did for the last 20 to 30 to 40 years. But if someone starts when they buy their first piece of real estate or if someone starts when they have their first $100,000 in their brokerage account, well, now you could start very simple, very small, and very cost effective. And you can put together a plug-and-play plan that as you grow, your plan grows. So it's never too early to start. What's your website again? I want everyone, everyone needs to listen to this and go reach out to Hillel. What's the website? Asset? Go ahead. Yeah, it's www.assetprotectionattorneys.com. And again, if they mention your show, I'll send them complimentary copies of our latest books. Last question about building a business starting today. if I'm starting today, what would you tell me to do? Put it in what type of entity? What kind of safeguards do I want to have on there? Because I do believe it'll grow in massive value. That's why I'm starting the business. So, but I may not have the business forever. There may be a sell point, right? So I wouldn't want to put it in an irrevocable trust like we talked about because that has some challenges, right? So knowing I'm going to go crush this, I'm starting it today after this podcast. What are the suggestions you're going to have for me? First thing you should do hands down, which nobody does, is have a call or a Zoom with your team. Because what normally happens is you call the accountant and say, hey, I want to start a business. And the accountant says, I'm just making this up. Go start an S-corp. Well, an S-corp may be good for taxes, but is that the best thing for estate planning, tax planning, business succession planning, financial planning, accounting, insurance? So the biggest thing I see when I speak across the country, I don't care if you're starting out or if you're successful, nobody's team is talking. And you can't always get it perfect. You're not going to always have the best asset protection and the best estate planning and the best tax planning. There's sacrifices. But you've got to make sure the team's talking so you can hear the advantages and disadvantages of every single item. And then you can find what's best for you because none of this stuff is cookie cutter. You know, everybody's assets are different, personal and business, and everybody's potential threats and creditors and liabilities are different. What works for you may not work for me. You know, you may be protecting against a teenage driver, others from a third marriage, whatever it may be. So you want to have an individualized, customized, and tailored plan. And it's never all or nothing. You know, you mentioned, hey, I may not want to put it in the irrevocable trust. Well, it's not zero or 100. Maybe we split the baby. Maybe you take 25% of the business and you put it in the irrevocable trust. That way you have a hedge on estate taxes for one-fourth the business. But 75% of the business you own through yourself or through some sort of protective entity where you can easily get the cash flow. So, again, do what's right for you, not for everybody else. Yeah, and your point of get your team together, right? So have the asset protection attorneys, have your accountant, have your tax strategist. Because, by the way, an accountant isn't the same thing as a tax strategist for the most part. There's some nuance and some probably pretty cool accounts. Yeah, look, most accountants just report, not all of them, but most accountants just report a tax attorney may be doing more of strategy. That's right. Hello, Presser. This has been a pleasure. You're going to be speaking on my stages, the Entrepreneur DNA stages, the Moore Show stages. We're going to, because this is so valuable beyond, like, the benefit of my podcast is I have access to you. They need access to you. Absolutely. And that's what I want to start creating for these clubs. And so we're going to have we're going to do some fun stuff together, dude. I look forward to it. And thank you for having me. You're very welcome. And if you think someone should reach out to Hillel, make sure you share this with at least two of your friends, because everyone needs to start early. Like he said, we'll see you on the next episode. Peace. If you like the show, please take a moment to rate, review and subscribe. It really does help the show to grow. Thank you for listening. Thank you.