Mark J. Kohler - Lawyers are Liars: The Truth About Protecting Our Assets

Mark J. Kohler

I would like to dedicate this book to Jennifer, my wife and best friend, for her love and unselfish support of all my endeavors.

Also, to Dillon, Sydney, Allison and Molly, the most amazing children a parent could hope for.

Acknowledgments

Preface

Introduction - Why use the title Lawyers are Liars?

PART I - WHAT DOESN'T WORK

Why Asset Protection?

The Myths

The Goal of Asset Protection

The Proper Approach to Asset Protection

Is there an Ethical Question?

The Big Picture

Deception #1

Round 1- This Structure is a Must for You!

Round 2- Elaborate is Better

Round 3- You Can and Should make Your Assets Disappear

Your Situation is Actually Different

Deception #2

Pitch #1- You Achieve More Privacy

Doing Business Exclusively in Nevada

Doing Business Outside of Nevada

Pitch #2- You Will Save more Taxes

Doing Business in Nevada as a Resident of another State with an Income Tax

Doing Business in another State with a Nevada Company

Pitch #3- You Have Better Asset Protection in Nevada

Business Liabilities

Personal Liabilities

The Final Word

Deception #3

What is the Hype?

A Comment on Illinois and Florida

Half Truth #1 - Land Trusts Hide the True Owner of a Property

Half Truth #2 - Land Trusts Provide Bulletproof Asset Protection

Half Truth #3 - Land Trusts Avoid the Due-on-Sale Clause in Loan Agreements

Half Truth #4 - Land Trusts Save Taxes

Revocable or Irrevocable

When a Land Trust Makes Sense

The Final Word - Savior or Snake Oil?

Deception #4

The Traits of the Current Off-Shore Promoter

A Comment on the Cost of Off-Shore Planning

Tax Avoidance Versus Evasion and Off-shore Planning

Terrorism and the Effect on Off-shore Planning

The True Deception - "Jail Time"

Does Off-Shore Planning Still Have a Place in Asset Protection?

Deception #5

The Nature of Partnerships

Considerations to Plan for in a Partnership

Planning for a Successful Marriage and Maybe Even Divorce

The "Last Word" on Partnerships and Marital Planning

PART II - WHAT DOES WORK

Similarities in the Approach to Warfare and Asset Protection

Assessing Your Need to Protect Yourself and Do Battle

Considering Your Ability to "Do Battle"

The Multiple Barrier Diagram

Continued Education and "Maintenance"

Chapter 8 103

The Team Concept

Is there Such a Thing as an Asset Protection Lawyer?

Your Most Trusted Advisor is You!

Choose Wise Educational Opportunities

The Fraudulent Transfer Act- A Must to Understand

Protecting our Personal Residence

Protecting Yourself from Your Auto(s)

Liability Insurance

Continually Evaluate the Battlefield

Homestead Exemption

Retirement Plans

Annuities

Exemptions Related to Income

Life Insurance

The Final Word on Exemptions

Operating your Business in the Proper Structure

Protecting the Corporate Veil

Liability Insurance

Managing Your Employees Properly

The Beauty of Entrepreneurship

Umbrella Insurance

Equity Stripping

Series LLCs

Charging Order Protection Entities "COPE's"

Trusts Generally

Spendthrift and Discretionary Trusts

Beneficiary Defective Discretionary Spendthrift Trusts

Domestic Asset Protection Trusts

Enforcing and Collecting the Judgment

Foreign Asset Protection Trusts

Foreign Charging Order Protection Entities

FCOPEs versus Foreign Asset Protection Trusts

Multi Layering Your Barriers

Sole-Proprietorship

General Partnership

Corporations in General

C-Corporation

S-Corporation

Limited Liability Company

Limited Partnerships and "Family" Limited Partnerships

Business Entity Matrix

First and foremost, I must thank my beautiful wife, Jennifer, and wonderful children, Dillon, Allison, Sydney and Molly, for being patient and understanding with the additional workload writing this book put on my time and energy. It certainly was a sacrifice as a family to embark on this endeavor and I truly appreciate their love and support.

It is also with great pleasure that I acknowledge the significant contribution of Jim Piccolo and his team at Nouveau Riche University for the incredible support they gave me throughout the development of this book. Jim's vision, guidance, and support, not to mention his high standard for excellence was remarkable and absolutely critical for what has become a life changing experience for me while completing this project.

Thanks to my four tax-law partners Mat Sorensen, Jim Park, Jason Helquist, and Theresa Fette-Warner for their countless hours helping contribute to the concepts, technical reviews, and accuracy of the information presented. Thank you to Dan Baldwin for your outstanding job in editing and researching for the book.

A special thank you to my life long friend, law partner, and brother Bryan Kohler. He has always given me sage advice about what is best for me and my family, and offers me more support than he realizes.

I must also acknowledged my incredible staff at the law firm and accounting firm who were patient and understanding with my sabbatical from the offices to write this book. My partner LaDell Eyre was left to manage our accounting firm during a busy tax season and I can't say thank you to him enough for his understanding with my uncanny ability to spread myself too thin. Specifically, I must thank my amazing friend and office manager, Debborah Stanton, for her ability to hold our office and her family together at the same time throughout this amazing ride we have been on. Her talents never cease to amaze me.

Finally, I wouldn't be where I am today without the most supportive and loving father and mother; Marden and Joy Kohler. I thank them continually for their unrelenting commitment to encourage and assist me in anything I embark upon. My sister Suzanne Kohler has given this same love and support to me my entire life. I am truly grateful for such a wonderful family.

Lawyers are Liars. This is a statement maybe some of us have heard many times before. Maybe even in the context of a "lawyer joke" where we laughed or snickered at the dubious reputation of attorneys. Some of us may have even declared "lawyers are liars" ourselves in a personal and frustrating brush with the legal industry. But is it true?

I realize that the title of this book is shocking to some; provocative and dangerous to others, and may even seem reckless to a portion of those practicing in the legal community, but please don't misunderstand my position. I am not stating that all lawyers are liars; I am presenting the statement as part of a serious discussion that needs to take place. Issues must be addressed because of this regrettable declaration often made in public and private circles.

With that in mind, early in 2006 I decided to write a book about deceivers and liars in the asset protection industry, whether they were lawyers or not. Every week my law and accounting partners came across heartbreaking experiences where new, as well as seasoned business owners, investors and simple everyday "run of the mill" families were taken advantage of with expensive, unnecessary, and even incompetent legal and tax planning. Interestingly enough I also realized early on in this process that it was often times not "lawyers" and "CPAs" that were misleading and deceiving consumers with their strategies and structures (although there are always a few bad apples in any bushel).