Lawsuit-Proof Your Fortune - Blake Harris

Welcome to the proven podcast where it does not matter what you think only what you can prove Our guest today is attorney Blake Harris managing attorney at the nation's largest exclusively offshore asset protection law firm and proven expert who has helped clients protect millions and assets from lawsuits divorces and creditors through offshore trust structure the show starts now Everybody welcome back to the show today. I have attorney Blake Harris with me. Thank you for joining Charles great to be on the show. Thanks for having me Absolutely for the fewer people who don't know who you are kind of can be a little bit of a background of who you are and what's going on For the last few people who haven't heard of attorney Blake Harris I am the managing attorney at the nation's largest exclusively offshore asset protection law firm Myself and my team of attorneys and support staff we help individuals create structures So that in the event that they go through any type of litigation or lawsuit They're able to keep their assets safe from any court judgments So when you talk about asset protection, let's talk about the difference. First off Most people don't understand what the difference is between an asset and a liability So I've always learned that as assets make you money liabilities cost you money I'm guessing you're a little bit higher than that when you're talking about what type of asset protection are we talking about? So an asset is simply in the world of asset protection planning something that somebody can take away from you So if you have an asset worth $100 but there's debt on that asset of $90 you only have an asset worth $10 and then that $10 value is something that my firm is going to help you protect An asset can be cash stocks bonds crypto real estate Now lots of assets are already protected such as Homes in certain states, florida and texas for example give you complete protection over your home Certain states give a couple hundred thousands some give tens of thousands and there's a few that don't have any protection So we'd employ other strategies for protecting that type of real estate also Up to a certain limit retirement accounts qualified retirement plans IRAs 401ks are also protected Certain investments in annuities and insurance are protected as well So we'd sort the process by looking at what is already protected and then for what's not protected We'd put together some strategy to make it so that it's unreachable by a creditor So what when people talk about creditors versus not creditors? Who are the people that are coming after your assets in this example? I mean you're most people have spent a long time trying to build an empire and create some sort of business that's doing Well, but then who are the people are actually coming at her? So the three most common lawsuits would be first of all business disputes You've got an employee who's not a former employee who's unhappy about the termination Coming after their current employer or you have suppliers that are unhappy with their distributors Or business partners or for whatever reason business disputes are very common And that's a issue that you would want to plan ahead for perhaps you've sold a business And now the new owner of the business is not managing the business as well as you they may try to undo that transaction And when they do that you could end up even going to debt because whatever you sold the company for a portion that Got sent over to the irs So business disputes would be the most common lawsuit Next would be divorce divorce is actually the most common lawsuit But in terms of asset protection planning we see more business disputes followed by divorce This is not going to be the most romantic thing you ever hear but definitely look at signing a pre and upper post-nuptial agreement These are not bulletproof strategies But they do help to at least get both parties to a mental state As to what would be appropriate in the division of assets and sometimes courts will respect them But not always which is why it's good to have additional layers of protection. And then finally Car accidents are nations roads are quickly becoming a highway to wealth I would recommend buying as much car insurance as your agent will sell you However, when it comes to insurance my philosophy is buy but don't rely Every insurance policy has a long list of exclusions which your insurance agent probably did not go over with you at the time that they sold you the policy Every policy has a limit on the amount that they will pay out and there have been Many catastrophic claims which go well beyond policy limits So you're looking at business disputes divorce and car accidents as three most common issues But there's lots of different reasons people get sued Jesus so people come in that make a certain amount of wealth They're getting sued from car accidents from divorces from business partners or former employees There was this idea that with specifically for employees that you could just make them 1099s And it's not a problem or if you sign a prenup it covers the entire marriage Put holes in that for me So as far as a 1099 you have removed the issue of them being an employee However, they could still come back and say actually this would have been Better classified as me being an employee But even without that that's still a business relationship you have with your contractor and contractors Sue the people they're contracting with quite frequently As far as prenuptial agreements are concerned. These are strictly these are closely scrutinized by courts And courts sometimes will uphold them But lots of times they'll say this was signed so long ago Or what happened here should not apply because there's some other bad action Or this is unreasonable Perhaps one party wasn't represented or they weren't properly represented And the courts are going to say we're not interested in what the contract says We're interested in doing what we as the court feel is right And they will disregard the prenup and go after assets which both parties had previously agreed to keep separate So a court can just throw out the prenups like no this doesn't this is not applicable anymore And it's based on the the court's decision US courts have broad powers to Gets the results that they want some judges will simply follow the law But lots of judges are result oriented and they're not concerned about what it takes to get there Even if they have to disregard legal documents Okay, so now that we know that court documents and contracts and prenups and all these other things completely can get disregarded Jesus one of the ways now that everyone who's listening just wants just are terrified What are the ways are there certain vehicles not as far as what you drive but certain ways you can protect your assets And if you could explain vehicles to people who don't know what are the certain ways that you can protect it absolutely so for a Better level of protection What would be wise would be to set up a type of asset protection trust With this structure what you do is you hand over your assets to a third party who then hold them for your benefit Think of a asset protection trust like having a close friend perhaps your next door neighbor who you trust dearly You go and you give your yacht your boat to your next door neighbor Now if you want to go right around the boat for the weekend your neighbor will let you do that if you want to Enjoy anything that you've given to your neighbor they can allow that But if you get sued nobody's going to be able to go and collect from your neighbor Now to take this a step farther with an asset protection trust There's a legal requirement that the neighbor also We should refer to them as the trustee has to hold those assets for your benefit So while the trustee retains legal title Beneficial ownership flows into your hands and within the world of asset protection trust You have your domestic options and offshore options and we can go into that more whenever you're ready to start asking about that Yeah, absolutely. So if let's say you don't have a neighbor that you really trust and you build one of these trusts And it's an offshore one because we're going to get that into a second or why it matters And and thank you for taking us through this very elementary version of it because I just want to get really caught up Because for a lot of people this is things they've never heard of these are things like what I've never heard of this There are proven things out there that work that aren't exposed because so many entrepreneurs are just trying to make it And get across that line But now that I've made this wealth how do I protect myself from lawsuits or anything else? What happens if I don't have what is the difference between like I don't have a neighbor that I trust versus an actual trust? Well, there's the legal obligation of a trustee and they are in the business of selling trust not necessarily the document but Getting people comfortable with their reputation With their history that they're going to do exactly what they say they're going to do and that's what's very important to Properly that your trustee there are domestic options. There's lots of different international options there are some excellent trust companies and there are some questionable trust companies as well and Having proper guidance and helping you select the trustee is going to be the most important decision that you make when creating an asset protection plan Guess it's when you're talking about domestic versus foreign and you're talking domestic i.e in the united states Do every trust have to have a trustee to it or can it just be a board? A every trust has a trustee every trust has three parties at a minimum of a minimum of three parties First of first one is the grantor also known as a settler. This is typically the client Next you have the trustee we would always recommend using a professionally licensed trust company The third you have the beneficiary the one who has the right to receive distributions And with an self settled asset protection trust the client is both the grantor and the beneficiary And then you have the third party trustee in there as well So there are talks about like you could set up in Wyoming or you could set up in Delaware And you can't penetrate the trust and all these can you what is the truths about that? What are some myths you can dispel about doing that here domestically? So the truth is you can set up a domestic asset protection trust There's about 18 different states that allow for the use of a self settled asset protection trust But you should be aware of article four Section one of the u.s constitution the full faith and credit clause which requires courts to honor judgments And court orders from other states So if somebody gets a judgment and goes to enforce that court order in a different state and one of those states Does not recognize domestic asset protection trust There's an opportunity to penetrate the trust and the case law goes deep into that Which shows that there have been many situations where these domestic trusts have been compromised I don't believe that they are worthless I do think that they provide a nice speed bump and slowing down a creditor But I certainly would not rely solely on a domestic asset protection trust if your assets are Exceeding 500 000 or a million dollars So you talk about speed bumps domestically versus what you do specifically Which is foreign which are these brick walls that people run into Walk me through offshore trusts and what does that mean? So with an offshore trust the trustee by law is not allowed to recognize any us court orders so everything we just discussed about article four section one the full faith and credit clause It does not apply beyond the non-recognition mission of us court orders There are several other hurdles which prevent plaintiffs from wanting to go and mitigate an offshore jurisdiction Proan simply finding legal counsel that can represent you is going to be challenging because there's a limited number of Qualified attorneys and u.s. Attorneys cannot go and litigate in these other jurisdictions Unless they happen to be licensed in Belize or nevus or cook island, which is extremely rare Top of that contingency fees are not allowed Meaning that you could have won a case here in the united states without paying anything But as soon as you want to actually go enforce the judgment you're going to have to come out of pocket There is a much higher standard of proof in the united states to win a civil case You need what's called a preponderance of the evident if you can convince the court that 51 chance that you're right you win in The situation of an offshore trust you have to prove a standard that the united states reserves only for criminal matters That's a standard of beyond a reasonable doubt basically a 99.9 Chance that whatever claim you're putting forth is correct. It's a standard proof that very hard to prove and it's a reason that Most plain tips don't even want to try to go and litigate Offshore and it's a reason that most people who do go litigate offshore are not successful On top of that there's typically a hefty bond requirement Sometimes around a hundred thousand dollars or more and when you add up all these different layers all these different hurdles You're going to find that most plain tips when they find out that you have an offshore trust will do either number one Drop their case. They simply just don't want to pursue international litigation An attorney is going to say no i've got a mortgage. I need to pay. I need to focus on a place where I can actually collect Or number two you're going to find that the opposing party is much more willing to Settle and settlement is the name of the game now if a client is hit with a completely Meritless case someone brought a bs case against them. I would simply say offer nothing Don't even entertain this clown However, if there is a legitimate case and my client did harm somebody I am going to advise them to make some settlement offer but make sure it's reasonable It's fair to the client and then we can move forward and the client is going to in the entire time have the utmost peace of mind that their money is safe They can pay off a settlement in an appropriate amount and move forward with their life without fear Gotcha. So i'm guessing that not all offshore trusts are the same and what are the places that you can have offshore trusts? So there's about two dozen different jurisdiction to it's allowed for the use of an offshore asset protection trust mostly smaller countries that this is a Interesting a good opportunity for them to grow financial services business one which doesn't put a strain on their natural resources or an already overrun tourism industry for Example but of those 20 30 different countries which allow for the use of an international asset protection trust There's only three countries which have good codified case law supported legislation which routinely Frequently and gladly work with Americans working with Americans is a little bit more complex because there's certain iris reporting requirements And a lot of the world just doesn't want to deal with working with Americans because of that headache But some jurisdictions say well actually those americans. They've got a lot of money There's a lot of people there who want to set these up. We're going to cater to them So the three jurisdictions with good codified case law supported legislation Cook Islands Nevis and Belize Belize great law in place Not the best place to do business the regulatory environment has proven to be a little bit unstable a little bit unpredictable In some circumstances that we would utilize Belize, but it's generally not our first choice for setting up a trust Nevis has a better regulatory environment. They have been in the business quite a while. There are some good trust companies there However, our preference still is the Cook Islands First of all, it's increased distance from the united states down in the south pacific as opposed to close to me here in Miami in the Caribbean Decreases people's chance that they are going to actually go after it Psychologically, it's farther away on top of that the Cook Islands has been in the business the longest And it's simply a very safe and transparent country They do business in a way that is just not shady They're very honest and open about how they do business and there's a lot of trust that is Well placed in the Cook Islands. No pun intended No pun intended So if there was a laundry list of assets, do you need a separate trust for each and every one of your assets? Or do you just have one umbrella trust? so Generally for asset protection planning Only would be recommending one offshore trust In the rare situation that we have somebody who is worth Over 50 million we may look at setting up multiple offshore trust But for the majority of people one offshore trust if your net worth is between 500,000 and 50 million we only be we'd only be recommending one trust So in that dynamic if we have an offshore trust and we're trying to protect our assets for whatever reason we're trying to protect our assets How does that affect taxes because here in the united states people are generating a certain amount of money and they're doing different things I cost segregation in real estate and all of that especially with the new bill that's recently passed There's ways to handle depreciation all that. How does having a trust affect that? Absolutely, we don't want to have our clients miss out on any tax planning opportunities That's why we structure the trust typically as a grantor trust So anything that takes place in the trust flows through to the client now when the money is in the trust It's still being invested. You're still earning dividend You're still seeing your investments grow if you're selling them you may have shorter long-term capital gains But all of that is taxed in the exact same way be taxed if the trust did not exist Now you do need to be aware that there are certain reporting requirements when you have an offshore trust You do need to inform the irs and fence and they have an offshore trust and an offshore bank account With proper guidance those forms are nothing complex to complete Do trust have multiple companies in them as well? So because I own multiple companies and I have multiple things that are spread across Do I just if I already have these things established do I have to destroy them or can I just move them over? Certainly no need to destroy them One trust can own an unlimited number of bank accounts It can own an unlimited amount of cryptocurrency and it can own an unlimited number of businesses Now we would want to evaluate the businesses and see What the best strategy is for protecting them because lots of businesses they may produce some good cash But there are not they don't have a lot of assets that somebody could take It may be a situation where we want to keep the business out And then just as there's excess cash Put that into the trust because there's certain liability That's always going to be attached to the business that you're not going to be able to divorce from the business In which case maybe keeping that out of the trust is best strategy Another situation is where you have a cat where you have a company that has a lot of hard assets What we would do is have the client perhaps Decoupled the hard assets from the company and then have the operating company Which has a lot of risks because it's dealing with the suppliers and customers Lease those hard assets from a third-party company and then have that third-party company Owned or backed by the trust potentially even doing some equity stripping Which is probably something we should discuss here at some point I was about to ask You know, so I I own a company I make chocolate bars whatever it is and I have these machines that Create and create all this chocolate if I already own them and they're free and clear Do I move them into a different entity and then lease from it and basically pay myself access to that or how does that work? How does equity stripping work on that environment? Exactly. So we've got Charlie's chocolate factory over here, which then Which has a lot of machinery in it Charles forms a separate company Charles is operating company or charges equipment company And then the operating company simply leases these assets when somebody sues the chocolate factory They're going to find there's actually no assets to take all the equipment is leased by this third party Who's not subject or tied to the lawsuit and it's also going to be backed by the offshore trust So let's say I have a car I'm leasing it for whatever reason if I've already done that is it hard to move that type of thing into a trust or once It's already established or I have to rent a new car at least a new car. How do I do that? So if it is a rental we'd probably leave it out of the trust because quite frankly nobody wants to take Your lease because then they're stuck still paying for it going forward So leasing asset is a good way to keep yourself unattractive to lawsuits. No, we don't want to put rented Property into the trust whether it's a car or a home condo What are the what are the things can you Do to make yourself as unattractive as possible to be for lawsuits other than I mean because I think the trust Really in my mind is if you've reached a certain level of wealth over 500k you just you need trust There's just there's no way around it right now you kind of need that and it sounds like if you do it in the United States You've just dispelled the fact that domestic ones it doesn't matter It's it's kind of you need something offshore and really get into the Cook Islands. So that makes sense to me but going To address your question make yourself unattractive one thing is don't be flashy your CPA your attorney needs to know what's going on with their Finances, but the more that you put your wealth out there more likely If somebody's going to think that looks kind of juicy and wants to target it now I do work with a number of people who they're able to grow wealth because they display wealth And in that situation I say that's part of the game You need to do your tick tocks and show your yacht and show your cars because that helps you grow wealth Keep doing it. We're going to look to do other strategies to keep you protected such as Take good care of your customers Generally people don't want to sue somebody who they thought really cared about them Now on the other hand if people get the impression that this person never really cared about me in the first place They're more than happy to go ahead and sue and sue somebody include ADR write these three letters down Alternate dispute resolution in any contract you have whether that's with an employee whether that's with a Supplier business partners It just makes sense that any dispute is settled outside of court by a neutral third-party arbitrator Gotcha, and you just add that to any contract and most people are most people probably don't know an ADR Is this something that you can just chat gpt it or do you really want to go and work with a lawyer on this? Something's better than nothing However, if you're asking a licensed attorney We are not recommending chat gpt to replace us just yet But but I would say if you're not if you don't have the budget for an attorney or you just don't want to spend the money on an attorney Yes, coming up with something on your own is certainly going to be better than having nothing Yeah, with with my last name being schwarz if it comes to not having the budget that's fine But if you can't afford it, please the love of god whoever's listening higher professional, please love god It's gonna save you in the long run It's an ounce of prevention is worth the pound of the cure and properly drafted business contracts Where it's very clear how things were laid out in the terms the contract are fair and reasonable Will go a lot farther than Trying to litigate and fight it out afterwards Gotcha What are some of the major mistakes people make that run into because when you've done this for a while now What are some of the things that you walk into again that that god? I wish you guys wouldn't do this every single time So a few one of them is waiting too long. I get the call. Oh, I'm concerned that at some point I might be sued should I set up a trust? Well, yes, that's exactly what a trust can do for you And then six months later we hear from someone and they say I've already been sued and at that point There may be an opportunity might be an opportunity to do some damage mitigation We're not going to be able to get them the same result. We'd be able to get them if they did pre-planning Next is simply thinking that you don't have enough assets The offshore industry is generally pretty well Disliked by a lot of the legal industry because well if everybody had an offshore trust all the plaintiff attorneys They would be going out of business the defense attorneys would be going out of business to the man to go into law school and law Professors got a business and then all these talented and brilliant and smart hardworking individuals would have to go get another job Or they're actually producing something for society instead of just fighting over money I like that option. Can we make that the option? Everybody has an offshore trust that would be a good thing. Congratulations. Everyone needs an offshore trust. You graduated college Congratulations. You have an offshore trust period. I just think everyone should have this Charles I wish I could hire you as a as a spokesperson put you put you on a put you on a billboard um The reality is also most attorneys have not dug deep into this area of the law It's an area of law that is not taught in law school It took a tremendous amount of time effort money travel in order to gain the level of Understanding that I had that my firm has with these offshore trust and by putting this planning in place We're able to let the clients free themselves of the fear of Lawsuits back up for a second. What exactly was your question? Because I don't know if I hit it right on the point And so you're actually entered a bunch of questions and created new questions for me So if people are coming in and you know, they have this and they want to protect themselves And they have these opportunities Do it as soon as possible is super important and we talk about the mistakes And then what are the other ones and then what are the victories that you've run into as well? Okay, so and then the third mistake and then we'll get into the victories is not working with the right professional we've seen a lot of people jump into this industry and Unfortunately, lots of people will get started down their path and then find out They're not going to be able to get approved with the right trustee because they did not onboard themselves They did not do the proper onboarding. They did not disclose information properly or even worse They get a trust set up, but then they're not able to fund the fund the trust. It's an area that is deals with the laws of multiple different jurisdictions where the laws are changing the people in the industry are changing you want to work with somebody who's very reputable and understands this Industry inside and out and really is dedicated to this industry the chances that you're going to find somebody who can set up an Offshore trust well for you while they're also busy litigating probate cases and writing simple wills Is it pretty small? So the next option the next thing is working with the right law firm working with the right Professional in terms of victories. There's lots of victories that we that we've seen and this is Absolutely the most rewarding part about my job when somebody calls and says the trust work exactly as we hoped it did We've had situations where people sold a business kind of like the example I was giving Giving earlier the new owner comes in and tries to sue the client And what ends up happening is the client's able to settle for pennies on the dollar because of the structure that they've created We've also seen situations where Doctors will set up a trust just because they're concerned some day a patient may sue them And then a few years go by no patients ever file any claims against them But their spouse files for divorce and then at that time their trust becomes a very effective tool in helping them keep their assets through that crisis So if someone's going to get married and wants to have that 67 value ratio in their life Do you recommend they do a trust or do you recommend they do a pre-mult? Belgium suspenders the only downside to pre-mult is you may piss off your spouse when you ask for one But aside from that, I generally think a prenup is good But you get much better protection with the trust if you're only able to do one of those The better results will certainly come from the structure which the u.s. Court can't break Yeah, have you ever seen a because I think you you prefer cook islands. Have you ever seen a cook island trust get penetrated? Absolutely not now In the history of the cook islands There's never been a time when a properly structured cook island's trust was penetrated the times when a trust was compromised the client kept money in the united states So what you want to do is both parts? Let me back up asset protection bulls down to two parts charles number one the control of the asset with the cook islands Or nebis or bullies you're going to have a great jurisdiction for controlling the assets and for all the reasons we discussed Previously it's not an attractive place for somebody to go and sue But the other aspect is the physical location of the asset It is wise to have the physical asset outside the united states And so this is where opening an offshore bank account comes into place Sometimes in the cook islands but more frequently in switzerland or lechendstein Sometimes in panama just as long as it's outside the united states in a good banking jurisdiction That is where you see some real protection So we've never once had a client had their assets compromised We've never once lost a penny for a client in the history of the cook islands I don't know that anyone has successfully broken into an offshore trust when there's properly structured assets offshore Another mistake going back to your previous question is giving the client too much control And this is something to stay away from where someone says we're going to set up an asset protection trust But you're going to be the trustee yourself or you're going to be the protector yourself If you do that you've really compromised a lot of the protection But if the assets are offshore if it the trustee is offshore and you do this before You're going to end up with at minimum Very good result most likely a great result So when you hire these trustees because remember as you talked about before I don't have a neighbor that I trust you hire a trustee Can they just run away with your money? I mean is there a risk there? That is a concern of every potential client and it was a concern of mine when I got into this industry over 10 years ago Now having worked in the industry as long as they have I've come to learn that these foreign trustees are better supervised than many domestic trustees I've never seen a situation where a professional trustee ran I've never seen or heard of a situation where a professional trustee just ran away with the money Except for one time and that was a trustee out of Chicago So is it a possibility? Well, when you put your money at the bank, it's a possibility it could get robbed There's no real place anywhere in the world where money is completely safe But what you can do is find someone who's well incentivized Well, if I put it in the bank up to 250k and in an institution it's protected So I'll I'll get that back about what as long as I don't put more than 250k in each individual institution But if I put all of my money in an offshore bank in switzerland and luchstein or wherever else it is And then I pay everything with my mx black card and I'm just doing that I'm still trusting someone to protect my assets completely How do I make sure that that's safe? So I'd like to Address that directly as far as the fdic insurance First of all, I don't know that the fdic actually has enough funds to cover all the accounts it claims to have And I've heard that the fdic has some obscene amount of time like 99 years to pay back the account It's I think more of an illusion of protection than actual Protection now the government could always just print and print and print which is doing now Which which which it's doing what you're doing now, but there's some discretion in how it's being done More important than finding a bank which and I'll add switzerland does have a similar fdic policy it's It's about a hundred thousand dollars that they insure But on top of that with the swiss banks any stocks bonds crypto are considered off-bounds sheets Even if the bank liquidates you get to keep your full stocks bond cash Not the cash the cash will be part of the liquidation More important than finding a bank Which is going to have insurance when it fails is finding a bank that's not going to fail in the first place And that's the reason that we love the swiss banks because they are highly Risk adverse they don't engage in prop trading. They don't engage investment banking They won't the banks we work with don't take money from outside investors Who will pressure management to take risky bets? And the cash that they keep on hand is much greater than the cash that american bank keeps on hand American bank might keep five to ten percent of its cash on hand some of the swiss banks we work with keep somewhere between 25 as high as 40 or even close to 50 percent of its cash On hand overall it's just a much safer place to have your money than most us banks In order to set up a trust is it beneficial to go to like in this case the cook islands to become a citizen of the cook islands How do you how do you handle that? Well, first of all, you will never become a citizen of the cook islands unless your mother or father is a cook islander That's the only way you can become a citizen of the cook islands in terms of travel I go to the cook islands frequently As well as lots of other countries where we do business from a do business in the future But for the client experience, you never have to leave home Okay, so what is the orientation you talked about before the orientation process? What does that look like if someone comes in to get it? I don't want to be sued. I don't want to lose anything I need to put my stuff in different banks. Do I have to travel to switzerland or lexenstein? Which please say yes because I would love to go there again. I love switzerland's one of my favorite places in the world I'm guessing you don't but you know, how do you set it up? What are the vehicles like you have a bank that's foreign and then they're using an mx card? Or what are you how are you doing all that? So if you do want to travel the trustees in the cook islands that bankers in switzerland They are happy to meet with you and the trustees and bankers They do come to america to meet with their clients as well In terms of getting everything set up You'll first get the trust established that's step one step two is get the bank account open You then wire the money into your bank account If you want a distribution You simply request from the trustee and provided that you're not Ordered to make that request that you actually wanted by your own free will the trustee will wire money back to you You can also have the trustee step in and pay your credit card bill This is not typically done unless there's a pending action against you and putting money in your pocket Who would subject those funds to being taken away? But yes, the trustee can pay your bills on your behalf They can lease you a car and they can pay your mortgage. They can pay for your children to go to school But if um, or if you want the money wired back to you directly that Consuming that's very common What do you prefer in that setup? You've heard here here's congratulations. You have a credit card Just go use that have a nice stand. We'll make sure it's getting paid off If there's no pending litigation We recommend not having the credit card be paid by the trustee. We prefer to have the client just handle that themselves If there is pending litigation, then yes, the trustee is happy to pay those bills on their behalf Okay, and when someone builds a trust, let's say they're someone from their 20s or 25 They need to come into this wealth or they just have enough money that they want to protect And they go to buy a house in the future Do they immediately buy the house and put it into the trust or they buy it to an individual? And again, I know you mentioned that houses are protected. So maybe it's the second property How do they how do they handle this? Well, I do want to clarify that not all houses are protected. Most houses are not protected Some states the fully protected for most most states It's limited the amount of protection that they have You can either buy the house yourself and then transfer it into the trust or the trust can can buy it directly It's usually administratively easier just to buy it yourself And then transferred in that way the trustee doesn't need to sign up on all the closing closing paperwork But and but you can definitely have the trust. He actually just got him buy a house at your direction as well Is it some people who already own properties? Is it hard to move it in? I mean, that's my biggest concern If I've got these asked that how difficult is it to move it in? Is it better to do it post or pre-corrupted? It's it's not difficult now for your primary home That would go directly into the trust for any other real estate that would be owned by an LLC and then the LLC Would be owned by the trust You're not actually moving the real estate You're just moving the ownership of that LLC or whatever corporate structure we see is appropriate Into the into the trust and then if there's no pending litigation the client can even stand as the manager of the trust and The client can say not as the manager excuse me as the manager of the LLC and still manage that rental property What are the good? What are the major mistakes people make when they think like what is the Pre-consumption of people like now you screwed that up. Don't do that. Just just don't do that anymore because a lot of people Heard of this and you already dispel some of them be it, you know, Delaware or Wyoming based, you know companies You're like, mmm that's that's that's penetrable So what are the ways that the other things that are just people believe because they listen to social media Which is adorable, but they need to stop and actually research and hire professionals What are some of the things they run into? Well, there's definitely lots of good information on social media and there's lots of questionable information on social media Well, actually outright bad and wrong information on social media And it seems like becoming a watchdog of the industry is now my calling Because it needs to because people need to know the truth Here's another It's the planning technique that more people should employ and that's equity stripping So you've got your rental property that's owned by an LLC, which is owned by the trust that right there does give a level of protection A court can't order you to directly hand over the property. It would require a separate lawsuit to Go after that property You have the ability to report on a financial affidavit that the value of that property is zero dollars those two are Small or smaller medium hurdles for a plaintiff to collect and they work better than pretty much any other They do work better than any domestic strategy But if you've got an asset that's got a lot of value in it that's still in the united states And you can't move it overseas you can move a bank account overseas easily But you can't cover a piece of real estate and move that overseas This is where it's important that people don't forget to do equity stripping You know, we'll bring in a third party lender. They will loan you if your property is worth 1.1 million they'll loan you a million dollars And then you're going to take that million dollars and put it into your offshore account If somebody tries to take that property from you They're going to have to pay off that million dollar loan first all of a sudden nobody wants to take that property What they'd rather do is take some settlement and when you consider the cost of foreclosure Maybe 30 40 thousand dollars to go after a million dollar piece of property for just 60 thousand dollars You may be able to just buy somebody off and say let's just settle this case for $50 for $50,000 or $60,000 And move on Gotcha. So it's really putting these blockers up in front of people just constantly because it's like listen There's here's things again as you said if you've done something wrong if you're a client you've done something wrong Then do the right thing however if the people are furthest and you want proper protection then do this is kind of what you're saying exactly So what are the ongoing fees like we'll get into what it costs to set this up But is it once it's set up? Is there ongoing costs you have to pay or how does that work? So there's four ongoing fees. Number one is the trustee. They're going to want to charge an annual fee $3,000 to $7,000 Next you have the protector a protector may charge More like one to $2,000 the protector has a very limited role They are an overseer to the trustee You know for whatever reason we want to change the trustee the protector has the ability to fire the current trustee and hire a new trustee They can hire a new trustee in a different country if we want to just flee the cook island Or they can hire a different trustee in the same country if for whatever reason Simply having the protector in there is enough to keep most trustees honest and doing exactly what we want them to do well Simply having the clients Repute having the trust companies reputation on the line is enough to have them want to do it long-standing relationships Trust built-in incentives are enough to want them to comply with everything we are requesting Um backup and repeat your question one more time charles. So what are the ongoing fees? You said there were four so trustee protector You're going the law firm is going to have some type of annual fee or an hourly fee that they want to Charge to serve as your ongoing advisor and then fourth you have your annual tax reporting Requirements with a CPA is going to bill you a couple thousand dollars for that as well So all and you're looking at close to between five and ten thousand dollars a year in annual maintenance for an offshore trust You mentioned before we when we spoke before that there are people who do this on their own They're like, hey, you know what? I'm not going to hire a lawyer. I'm going to do this completely on my own I don't want to pay the 10k a year or 5k a year What are some of the things and hurdles and mistakes that they run into that it just makes it just completely stupid to do that Well, the fee would not be reduced. You wouldn't completely wipe it out. You'd still need to hire a foreign trustee You'd still need to hire a protector. You'd still need to hire a CPA to complete the reporting requirement I certainly wouldn't recommend trying to do the reporting requirements on your own So Hire skipping the attorney portion is something that people can do Um, and the reality is you're just going to have more confidence if you work with a professional license Attorney it may work without an attorney. It may not work without an attorney But the whole point of the structure is to give our clients a peace of mind And you will have much more peace of mind working with the law firm that has set up hundreds or close to a thousand trust you're going to Know that you're doing things right you can know that you're working with the right offshore providers And you're going to know that you have the right legal guidance going forward when actually comes time to use the thing So when someone comes in and they want to do this and they want to set it off for a trust What are the steps that they do? How do they pick a law firm? How do they know? And again, it's a hard question to ask because you are one Why choose you versus something else if people are like, hey listen, you know, I heard you you're on the proofing podcast That's great. But I also want to do some other research What is some of the research that they need to be looking into to understand? Because a lot of stuff that you just shared People have no idea about and they're going to do their research. What are questions they should ask? I mean, I could give a quick pitch on my firms On our firms resume. We are the nation's largest exclusively offshore trust law firm We have third-party verification from several trust companies saying that we have sent them more business over the past few years than Anyone else in the world and I could go on about how our team teaches continued education We've taught lots of other attorneys how to do this type of work But what I would also say is very important is the communication style of the law firm that you're going to be working with You want to make sure that they are responsive and that you just feel confident with their process if people are not following through On the process before you get hired that would concern me that they're not going to follow through Once you get hired as well look into the reputation as well read reviews um See how long they've actually been doing this type of work based on their history of publications and past speaking engagements. There are Some competitors out there who are claiming things that are not accurate I mean and I could go into people claiming they've been in business longer than the cook islands has had an asset protection trust law in place People claiming they've set up more service more clients than the total number of clients that have been or ever created a cook island trust so there's definitely companies to watch out for But again, I think it very much comes down to Trusting your brain, but also trusting your gut as well right All right, so is there a laundry list of questions or that you'd ask? Uh, yes, absolutely. I think there's a lot of very important questions to ask. I would start off simply with Your experience in this field. Are you exclusive to this area? Have you ever been to the cook islands? I think that's a very important one as well if you're setting up a trust You want to make sure it's somebody who has personally vetted these offshore offshore providers? um, I think fees or something to consider Because you don't want to necessarily go for the cheapest one actually we definitely don't want to go with the cheapest one I'll make that very easy But you do want to go with somebody who provides you a very good value somebody who's transparent about their pricing Um, somebody who's well networked. I think that's a very important part as well I'm kind of equated to like having a doctor who maybe they can you have a foot doctor And if they don't know any other doctors and you have another issue You've got to start the entire search from the very beginning But if you have an attorney with a large global network and you have another issue that comes up with your asset protection planning You need to open a bank account a new country. You need to move the trust a new jurisdiction You accumulated some ip you want to know how to protect that And a well networked attorney is going to be a huge value at as well So when they're doing this, how long does this take? Is this a weekend thing? Is this a year thing? How long does it take to properly set this up? so Right now we are telling clients it takes about 30 days to get the trust established I had been working with several people down the south pacific to expedite that process and By the end of the year before next year. I think that I'll be able to Quote clients a week set up time the trust from 30 days It is I'm constantly going out trying to negotiate better deals make the process faster for our clients But for right now let's just set the expectation that it takes about 30 days to get the trust established And once the trust is established it takes about 30 days to get a bank account open for the trust If people wanted to track this down because this is a wealth of information I'm sure there's a lot more questions that people are going to have about this How do people find you how do they get in touch with you? How do they get in touch with your firm? What's the best way to get a hold of you? Blake Harris law All of the major social media platforms that got hundreds of thousands of followers across our various platforms we have A book I have a book that I've written We've got lots of information on our website I'd probably say Blake Harris law comm is the single greatest source of information Single source of information on the internet for information on offshore trust or simply contact my law firm go to our website Fill out a contact form a member of my team will reach out very shortly to schedule a call with one of our attorneys Where we will be able to diagnose your current situation and recommend whether or not an offshore trust is right for you I'd say probably two out of three people who contact our firm We don't recommend they set up an offshore trust We recommend that they do some other type of planning some other type of strategy But if they do fit then we are Glad to work with them. Why are there's a couple people that you don't recommend? Is it do they not have enough funds or what is the reason? Either they don't have enough funds or they already have or they have enough asset protection already Their assets are their retirement account. They're home. That's Protected maybe they have another 100,000 200,000 dollars Which would have necessarily recommend setting up a trust just for that Now there are some situations where we set up trust for clients who have very small assets because Either they've got big liability I mean it's a combination of two issues if you have big assets, but there's no way you're ever going to get sued Which that's nobody but if that was the situation I would say no, you don't get an offshore trust on the other hand if they had Fairly moderate assets maybe two three hundred thousand dollars But they had big liability coming now the protection trust could be very good for them as well So it's a number of factors that we look at and also the optics of the situation It's definitely better if there's no pinning litigation if there's some pinning litigation It's nothing too damaging then we may be able to set up the trust or certainly set up the trust to protect from future lawsuit as well But if we've got somebody who Either has some criminal background which a trust company would not want to work on Or just simply doesn't feel right to work with then we're going to not push forward with that client Attorney Blake Harris, I really appreciate it. There's a ton of information here that I learned. I thank you so much for coming on Charles, it's absolute pleasure. Thank you so much for having me Winners take action to protect what they've built before they need it. Your assets are either protected or they're not There's no middle ground when lawyers come knocking