You’ve put some planning in place to protect yourself and your family. Is having an LLC good enough? Should you stop there? Business planning with LLCs won’t really protect your personal assets if you get a judgment against you.
Colin Ley is an asset protection attorney and the co-founder of LayRoots (along with with partner in life & business – Shreya Ley)
Transcript:
- That’s Colin.
- That’s Shreya.
- And we are partners in life.
- And business.
- Haven’t done that one in a while.
- So, Shreya.
- Yes.
- Had a couple meetings today.
- Okay.
- Chatting with some people.
- Tell me about ’em.
- Running down the numbers and figures. And essentially, in one meeting today, I was answering the question, having the discussion of why should you do any more asset protection planning than LLCs. Like, should you do more than having an LLC?
- Should you?
- Well, yeah. I’m not gonna say no.
- It was a trick question.
- Look. You didn’t look at me. There 🥰 So, an LLC is designed to insulate your personal life from your business life, however, many attorneys know this and so, when they are targeting you for litigation, they just name you personally in the lawsuit. So, they might name your business but also you, personally. The idea of an LLC is to insulate that business liability but it doesn’t always work. The liability might spill over to you personally, in which–
- Well, they’re gonna try to, let’s say you own a lot of other things, besides that LLC.
- They want to name you personally because they want to get at your other assets. They want to get at all the assets that you own in your personal name. They don’t want to be trapped in the little LLC bubble.
- No.
- They want to get outside–
- They’re gonna be limited then.
- And take your stuff. Kind of like how insurance is one of the first places you go to, right, as you build your asset protection plan, so are business entities. It’s working your way up but when you want to get to a higher level of asset protection, when you want to have personal asset protection, you want to protect your personal assets, that’s when you start folding in.
- I know what to do next.
- Some other things. Like, what, what would you do next, Shreya?
- I would form a trust.
- Oh, an asset protection trust?
- Yeah, not just a regular trust.
- A special trust.
- Yeah.
- Once you’re in that trust, you can trust that you’ll have more asset protection from potential litigation against you.
- Mm hmm. I like that.
- Fantastic.
- I like feeling safe.
