Asset Protection and Lawsuit Prevention with Kevin Day

Our guest, Kevin Day,  is one of the leading estate planning and international asset protection planning attorneys in the United States. In this episode, Shannon and Kevin discuss the difference between a revocable and irrevocable trust, how an irrevocable trust protects your assets, offshore trusts, and how to gain control of your assets.

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Asset Protection and Lawsuit Prevention with Kevin Day

Shannon Robnett  00:45

Welcome back to Season Two of the real estate rundown show, I want to thank you guys for staying with us and putting up with us all year long. It’s been an incredible journey, we’ve had some amazing guests. And today, today is really no different. Today, I have got the honor and the pleasure of talking with a gentleman that I’ve gotten to know over the last year guy by the name of Kevin Day, and Kevin has got a unique story. He’s got an incredible skill set that is very, very sophisticated, but it’s one that you’re gonna want to stick around and listen to because Kevin talks about asset protection. And I know everybody’s got an LLC, everybody’s got a corporation. But that doesn’t really protect you to the degree that you need to be. And Kevin and I are gonna dive into that. And we’re gonna get to the nuts and bolts of how you really, really set yourself up, like the 1% does to protect yourself long term, and keep your stuff your stuff. So with that, I’d like to welcome my guest, Kevin De Kevin, how are you, man?

Kevin Day  01:45

Very good, Shan, it’s great to be here.

Shannon Robnett  01:49

So Kevin, you come with a long list of accomplishments and skill sets. Why don’t you give us a quick rundown of how you got to be doing what you’re doing and kind of the short version of what got you there, and why you decided to specialize in this area.

Kevin Day  02:07

Yeah, I was Securitas route. I was an international lawyer already, I speak Chinese and did contracts. And the US signed the Hague Convention on trusts in 1987. And it was a game changer for entrepreneurs. It was the first time that you could create an irrevocable trust. And we’ll get in those details later. And name yourself as a beneficiary rather than giving it away to whoever your heirs were and not having any access to your assets. And I started writing books, got about five books published back in the early 90s. There was only one guy that beat me to a Nolo Press book or Al Goldstein out of Florida. And I’d love to say that I was particularly brilliant. It was just good timing, you know, good luck.  

Shannon Robnett  03:06

Well, you know, Kevin, one of the things that I find with humble people like yourself that, that it’s not just the timing. It’s the persistence. You know, anybody can have the basic general knowledge. It’s the persistence to become an expert. And it’s the timing with which you bring that expertise to the table. But I don’t think you give yourself enough credit with that, as far as what you do know, and the space and time that you brought that expertise to the general populace and, and people that are looking to protect their assets.

Kevin Day  03:40

Yeah, well, thank you, Shannon. Essentially, a lawyer. Entrepreneurs said, hey, I want one of these. I don’t want to own anything. I want to control everything. They went to their lawyers or lawyers didn’t know anything about it. They went to the continuing ed people. And they found Arnold and me and we became the national gurus for continuing ed for lawyers and CPAs and had a fantastic time. Very successful, which means that there aren’t that many people in my bar. There’s only about eight lawyers that are true experts in the offshore trust. There’s more in the domestic versions that came up about 11 years after the Hague Convention. And when you’re successful, you don’t have to be a mill. You really work with the clients. You don’t, you know, I have 28 attorney staff at my law firm. We do Revocable Living Trusts we do wills and all that stuff. If you’re just in a living trust person, you have to do 1000s of them to cover your net. And with the complex stuff we do, that means that I can spend the same amount of time with some little person that just has, you know, two single-family residences. And as a W2 employee, their estate is just as important with the person that has 160 doors, you know, and I really love that I was lucky enough to be able to be in that position. And a few people that are in our area, it’s like, “Oh, if you don’t have, you know, $10 million estate, I’m not talking to you.” And you know, we have people that are, you know, $200,000 Estates, and they don’t want to lose it, and they’re in a high to just business, you know,

Shannon Robnett  05:45

You know, and that’s, and that’s the essence, right, is that creating that solution is not a one-size-fits-all, everybody’s business is a little bit different. There’s different things that people want, there’s different realities. And, you know, in your journey, you’ve seen it all done at all. But really, what was at the core was that you were still getting to the protection, right? I mean, we all still want that protection. And we all start out with the concept that, oh, we’ll put it in an LLC, and you’ll be protected. And there’s truth to that. But the rest of the world is sitting here out here trying to eat your lunch. So take us through that process of yes, there is protection in the LLC. But why? Why do we need more protection than that? Where do we need to go to be able to make sure that we’re completely indemnified?

Kevin Day  06:41

Yeah. And it’s not just the regular entrepreneur. Belief, it’s lawyers belief is that LLCs or corporations are the only answer. Real estate is going to be an LLC. You go to a corporate lawyer, real estate lawyer or an estate planning lawyer and say, I want lawsuit protection, they say how many things do you have? Okay, you need seven LLC s. Right. And they’re done serving. And all a company does is protects you from what’s inside that box. And as long as the corporate veil, everybody’s heard that term, corporate veil can’t be pierced. You didn’t buy groceries with your, you know, business credit card, and you keep everything up and do your minutes. It should stay in that box. But there’s two things and we have answers for them. The presumption is you lose what’s in that box, if that’s the problem, if you have a piece of property, the boiler blows up a family of five die, they’re going to take that property that harms them at least. And they’re going to try to say you were negligent in some way that makes piercing the corporate veil. But let’s say they can’t do that you’re still losing that property, we can remedy that. But what happens if they sue you personally has nothing to do with your investments, you look the wrong way, when you’re going through a light and hit somebody. And then they sue you. And then they asked you what do you own? Oh, I don’t own real property. But I own three LLCs what’s in the LLC is real property. Great. We’re gonna take those LLCs right. There, these charging order things and we can get into that. But there’s so much more to do. And lawyers just don’t think.

Shannon Robnett  08:43

That well, and you know, I’ve had conversations with you. And we’ve talked about, you know, everybody gets to this level where they, they can do what they need to do, like you said they become a mill, and they realize that diving deep, takes time, staying on the surface, and being the mill is where the money’s at, and I do have a funnel of you know, I can do 35 LLCs a day. But the reality is, let’s break this down a little bit more. So I own an apartment building, and I put that apartment building an LLC, and I do everything right. And that LLC is what owns that building. Correct. And so when there is an incident when there is an issue, the LLC is designed to create the separation between you and that apartment, but it’s not designed to protect the apartment. It’s designed to push off the liability away from you personally, but it’s really what I hear you saying is it was never designed to salvage or to save or to ensure the continued ownership and control of that asset. It’s just to create separation.

Kevin Day  09:55

Exactly. That’s all they do.  

Shannon Robnett  09:58

And so what is it that you see? It sounds a little bit like you know, the World Economic Forum, you will own nothing and you will love it. Right? I think your version of it I like a lot better than their version from just a little bit I’ve heard, but how is it that you can keep that so that I have an LLC? Right? And we still use an LLC? Correct? Right. And that asset that the boiler blows up, and there’s insurance, and they’re able to get to the limits of the insurance. But how do you protect that so that all my stuff still stays in my control?

Kevin Day  10:38

Yeah, well, let’s back up. Because as we know, and your other podcasts have actually, you know, touched on this, that we have 94% of the world’s lawsuits. But good entrepreneurs, we don’t, you know, freeze like a deer in the headlights, and we press on. And that’s great because it runs the economy, and it builds wealth for our families. But there’s only two ultimate owners in our legal system. And companies are not one of them. They are separate legal people, the IRS and the corporations code says that your LLC is your corporation, your limited partnership is not you and you have to treat it with that respect, as if Kevin Day owns that LLC. But somebody has to own the LLC, that LLC can be owned by a corp by a limited partnership by an LLC Corp Corp Corp, it will only end in two things a human, nobody owns you. And nobody owns an irrevocable trust. And so you don’t want to be the owner. And if we can create a separate legal owner, that’s all about you. You’re the 100% beneficiary, it’s all for you. But if you get sued, you can say it’s not me and the law supports it. You’re in a great position. That’s what Elon Musk did just 9-11 months ago, he got into a spat with another billionaire. The billionaire says I’m gonna sue you. And he said, Sue away, I don’t own anything. And so he had peace of mind. The suit actually started, they sued them for $133 million happened to lose. 

Shannon Robnett  12:33

But between billionaires I mean, Kevin, really? I mean, when we put that in perspective, 100 that’s like you and I arguing over lunch?

Kevin Day  12:39

Yeah, I’m suing you for $25. But he wasn’t sweating it. It didn’t destroy his attitude and his business progress. Because he said, I don’t know anything.  

Shannon Robnett  12:56

Yeah. And you can put people you’ve mentioned several times into this irrevocable trust. And we all hear about the trust. And usually people deal with that in their estate planning is the thought process, right? I’ve got to get a trust, I’ve got to do an island, or I’ve got to do some sort of a trust where all my assets go in there, so that they can be passed on. But you’re talking about using that trust as something that works even better while you’re still alive. And that you can direct and control. So let’s break it down. Talk to me about what the difference between a revocable and an irrevocable trust is, so that we can then take that to the next step and understand why that is where you want everything to end,

Kevin Day  13:41

Right. You want a revocable living trust, because we’re all on that conveyor belt, we’re gonna die. And you don’t want some lawyer getting 6% of your estate for filing five forms in the probate court. So they’re important but if they’re revocable means changeable and you get sued, the court will go, oh, then revert it back to you. So you can give it to the marshal that’s going to give it to your plaintiff. Irrevocable means that to some degree is not changeable. an eyelet which is for holding insurance, irrevocable life, insurance, trust, those are great for their job. They are making sure the proceeds and face value of an insurance policy is outside of your estate. So it all goes tax free to your heirs. But you’re not a beneficiary of that your heirs are, right?

Shannon Robnett  14:46

That’s the bad thing about life insurance and those kinds of things. Right. You’re never around to see the positive that could do.

Kevin Day  14:52

Right. These trusts are unique and before 1987 You couldn’t do it. You weren’t an irrevocable trust, if you name yourself as a beneficiary, it had no lawsuit protection whatsoever. But because we signed that, and subsequently because the offshore trusts aren’t inexpensive, but in 1997, US states started to pass laws that copycat ID, the Hague Convention. So you can create an irrevocable trust and name yourself as a beneficiary. What we do is create one underlying Wyoming or Nevada privacy company. So your name isn’t in public record. You’re not the legal owner, and we can prove it. But you can control it, you can have all the checkbook, it’s your little piggy bank for your family.

Shannon Robnett  15:47

So let me try and understand this, you have to remember, Kevin, I am a contractor. So concepts are sometimes hard for me. But we’re going to create this entity over here, we’re going to create this with a with a piece of paper, we’re going to give it an EIN, which means that it becomes alive according to the IRS, right, and the federal government, and it’s going to then get given all of my things. So I’ve got an office building over here, I’ve got an apartment building over here, I’ve got some gold and silver, all those things are gonna get given into this entity that we created on paper. And this does not, this owns it. But it just sits over here. And since it’s not real, I mean, it’s real, but it’s not real. I mean, it sits over there, it can’t get into trouble. It can’t cause a lawsuit. It can’t be negligent. It can’t be dereliction of duty, it can’t do any of the things that would get you sued, is that right?

Kevin Day  16:51

Not exactly. We do put everything in a structure like this, if it’s pre-marriage Divorce planning, because you don’t want to be the owner. And it works. Prenups are always challenged in there. One out of five are not recognized by the courts. But what our job is when we work with a client is that this is an over exaggeration, but we have three categories, zero and low liability assets, cash portfolio, notes payable, gold, crypto, that’s zero liability. That’s the low hanging fruit that a plaintiff’s lawyer wants those definitely go into this privacy company owned by the lawsuit proof trust, then we have super high liability. Real property. If, if you’re a syndicator, you’ve tripled the liability because you’re taking people’s money and you’ve got sec and other government regulation is liabilities. That let’s just take your regular investor. Those are high liability. And then there’s stuff that’s high value. Certainly machines that can take people’s arms off a restaurant or a coffee cart. You can’t buy enough insurance for one evening that went bad with a cold. Exactly real estate’s a perfect example of that middle road is high liability, but high value, what do we do with each one of those? And what we do with real estate, is we put a friendly lien on it from your piggy bank company. 

Shannon Robnett  18:41

Let’s wait a minute, Kevin. I’ve never heard of a lien being friendly ever.

Kevin Day  18:46

Yeah, if you go to Kevin Day lending, you know, and I’m charging good interest. That’s one thing if you go to Bank of America, and they’re the lien holder, that’s one thing. But if your own piggy bank, if we call that privacy company, golden mountain funding, or pine tree lending, and that holds your cash portfolio, gold, crypto, intellectual property, notes payable, all the Zero Liability assets, we’ve taken care of the hard stuff that zero liability, then your real property or other businesses that can harm people and get sued. We put a lien from yourself to yourself. And since the law says one company is not you, and we’ve gone one step further and made sure 100% of the ownership isn’t in your personal name, but in the lawsuit proof trust, and you’re the beneficiary of it. That’s a friendly lien. Our job is to create the proper consideration so that if somebody sue’s, a contingency for as low Are there a business partner on a project? They look at you? Do you, you know, live in the Hollywood Hills and drive a Bentley? Or do you live down in some other part of town driving a, you go and rent a studio, they’re not going to take that second course, you know, if you own a bunch of property, but Union Bank is on first and golden mountain lending is on second, there’s no equity there to sue. They can say you’ve got a great case, but I’m not going to spend money and my paralegals and everything working on this, right? Hourly lawyers will still take your money and do the investigation on your dime. And they’ll come back and say, let’s see if there’s any insurance because yeah, there’s 20. Joe’s plumbing trucks out there, I see him myself, I figured he was going to be a good hit for us in this lawsuit. But there’s UCC ones, there’s liens against all of his trucks and his building where his warehouse is, let’s just see if there’s some insurance, they’re gonna get out if they ran a whole suit, and gave their client this piece of paper. Litigation attorneys are not collection attorneys that goes to some other law firm, that law firm is going to say, oh, did Joe Smith Esquire tell you that that he doesn’t have any equity and all this stuff? Do you want to sue for malpractice? You get a lot of money from the lawyer, right? So even hourly lawyers, though pound their chest in front of you, but they’re telling their client get out quick?

Shannon Robnett  21:37

Yeah. So really, what you’re doing is, then you’re taking this entity, again, we’re back to the entity right, and we’ve got, the other entity that we’re creating that is taking all of the value. And when I say value, I mean, we’ve got a $10 million asset with a $5 million loan, there’s $5 million in value, right? That’s, that’s the liquidity that’s in there. So we’re putting the asset in here. So it’s got this and it has, this entity has the $5 million loan from Bank of America, and a $5 million loan from golden mountain bank, right. And golden mountain happens to be paying the shareholder distribution. To me, that’s how I’m getting money, because golden mountain is charging 6% interest or whatever. And so it’s getting paid $300,000 a year for its loan that is then being distributed to me. So I have cash, so I can live. And now these two assets are very protected. But in the case of I look left, and somebody came from the right, I have money coming in. How do you protect for that?

Kevin Day  22:43

Well, there’s two things. What we typically create 95% of the time is what’s called a doormat trust, you’re the beneficiary, but you’re not the trustee. But we don’t give anything to the trustee other than a piece of paper saying that owns an underlying company. There’s a lot of tactics in between. But the most extreme tactic we can take is making an active trust. Somebody gets a mammoth judgment against you, and you still need to live. As long as you don’t receive the funds directly to pay just like a carnation grandchild with a $16 million judgment against them. You say go to the trustee and say, Here’s my MasterCard bill for this month. I’m out there charging, but I’m not writing a check to pay it off. Here’s my you know, and, you know, please sell this house and buy me another house.

Shannon Robnett  23:37

So what it sounds like to me, Kevin is you know, this reminds me of the cartoons I used to watch where wily coyote used to show up and the Sheepdog would be there, and they would battle it out all day long. And you got the one lawyer trying to protect things and you’ve got the other lawyer trying to uncover things, right. And you’re just, you’re creating this, this layer of protection, and you’re using the exact same rules that the other attorneys use to come for it, to protect it. So you’re not inventing anything new, you’re just putting it together in the right steps and the right sequence, that if I do A and B, and C, when the inevitable or the unlikely happens, and D, E, and F become our contingency, we have that all there and protected. Otherwise, things function as normal. Money goes into an account, you get money out of an account, you live your life as normal, and you’re able to create that ability. All of that tied back to an irrevocable trust, which is not a real human that has the ownership of the asset. While golden mountain funding for this example, and its board of directors I have the checkbook.

Kevin Day  25:01

Exactly. I got it right. Yes, sir.

Shannon Robnett  25:05

Wow. So it’s not complicated, but it’s definitely not easy. Follow it, but it’s got a lot of moving parts in there that keep you. I mean, you mentioned the Wyoming Corporation, because that’s anonymous that keeps you from, you know, showing up anywhere. So now things just kind of disappear into the mist. If they do happen to figure out that this is who owns it, and they can track it down, there’s still not anything to have. And most people that wind up initiating the lawsuits in 94% of the lawsuits of the world that are started in America, are started by somebody who has an unfortunate accident and a lawyer that converge on a corner and say, we’re going to make this right with you. And for that, we’re going to take a contingent fee. Because most people that wind up wronged in a lawsuit don’t have hundreds of 1000s of dollars to feed that know, to go the distance

Kevin Day  26:09

No. And, you know, the stuff that we’ve seen. We want privacy about it. And in fact, when our clients have had issues 80% of the time, the adverse party never finds out that there’s a trust, they see golden mountain funding, but they don’t think it’s our client, they don’t even ask the right questions, bark up that tree, the 20% that have found out about the structure. After people have gotten judgments have entered into very positive settlements with our clients because they can’t get the assets. We want privacy, we don’t want them to know it’s related to you. But I better not be saying something behind closed doors, that I’d be embarrassed to tell a judge, it needs to work, I should be able to tell the judge and the adverse party, this is what we did this is when we did it, this is what happened. And here’s all the law, you’re not going to be able to get it.

Shannon Robnett  27:09

Right. And that’s almost as much of a deterrent, as you know, the little blinking light that says we have an alarm here, right? I mean, you’re looking at it going. Actually, that’s quite complicated. Kevin, I don’t know that I want to go through all the effort to unwind this, like you said, Let’s go the easy route. Because it’s about a payday here, let’s go the easy route, and let’s get the insurance and go for the limits of the insurance, which maybe half a million or 2 million or whatever. Because, you know, you see this and we just saw this with Alex Jones with Infowars, he got $100 million judgment, right? I mean, there’s no way you’re gonna collect on that, right. And you see these massive judgments that get thrown out there. And unless you’re somebody huge, like, you know, Wells Fargo or something, when they got in trouble there for doing the whole credit card thing, you know, until you you’re somebody like that, that has billions and billions of dollars, you’re not going to be able to collect on that. So what you’re really doing is you’re putting up a really high fence, you’re putting up a really good, a series of events that will take you to the conclusion that if you try and scale this castle wall, it’s going to take you a lot more time than you thought it’s going to take you a lot more effort than you thought and the princess is kind of an ogre. So you know, really, most of that is through thoughtful design, a deterrent, that then mitigates probably the desire of most attorneys, like you said, to even want to go down that road.

Kevin Day  28:51

Yeah, the friendly liens from your own lawsuit proof structure is golden. We had amazing successes through 2008 through 2015. We had people that were upside down, they’re saying, hey, you know, I’m upside down on these four properties, but my home and these two other properties are free and clear, or have lots of equity. You know, I’m totally hosed. Some of them didn’t even get deficiency judgments. They look at it’s not worth our time. Some of them got deficiency judgments. And we said have you looked at our client and they went away? We only had five judgments that were perfected in other states that then went to the States where our clients were perfected there and still three of them settled and like four others went away.

Shannon Robnett  29:47

So really, there’s still when you say went away, they’re still outstanding, but it’s not something anybody can do anything with because there’s they’ve realized that they went through all that effort and here they are, and they have a piece of paper, they’ve got the charging order. They’ve got all the stuff in order, but they realize that they’ve chased a ghost this whole time.

Kevin Day  30:06

Yes. The only reason why the three settled is they didn’t want to have that hanging out there for 10 years.

Shannon Robnett  30:13

Sure, they settled in the other people realized, look, I guess at this point, if we can cover our fees, we’re going to be in great shape, because otherwise we’re a total loss, because we realize where we’re at. And, you know. So it really, it’s really, to me, it’s designed to put the control in your hands. It’s really designed to do exactly what everybody believes their LLC is going to do. Right, everybody has this belief. And this is the thing that, you know, in our conversations that I’ve had with you, it’s really designed to make sure that people understand that the LLC isn’t all it’s cracked up to be. And beyond that, this is really what you think the LLC is doing for you. Now, this actually does it so that you’re outside of being idiot proof, and you can’t ever idiot proof that we’re you know, you’ve got to do the things in the right orders. So now you’ve got this whole thing. How complicated is this mechanism that you set up to operate? I mean, can a contractor do it?

Kevin Day  31:21

Yes, Shannon, even you?

Shannon Robnett  31:25

There’s hope for me, Kevin, there’s hope for me. I love it.

Kevin Day  31:28

So it sounds complex, because it’s new stuff. Even lawyers…

Shannon Robnett  31:34

That’s new to me, but not to you, for sure, right?

Kevin Day  31:37

Yes, it actually is. Because it seems complex, because new lawyers come to my continuing ed conferences, they are asking the same questions. They’re babes in the wood, because it’s all regular stuff, we’re just stacking it up in a different order, as you had said earlier. Then once it’s formed, the trust is on the shelf, all you have to remember is don’t call golden mountain lending my company in Wyoming call because you don’t want to be in a debt deposition and have that slip from your right, we’ll still be able to get it protected. But now we have to spend another $30,000 Because that doors are open. So you always formally address it. The trust is on the shelf. It’s not yours from a lawsuit perspective. And you have the checkbook, you simplify our lives, we theoretically have two checkbooks, the or a checkbook from a checking account and a savings account. And we keep a little bit of money in the checking account. And we have long term savings in the others and we bring money over when we need it. That’s what golden mountain lending is. It’s your long term savings account, it has all your liquid wealth, and operating capital for the long run. You can take it to consume or you can borrow it into a real estate LLC to buy another property or put down on. So your life is just one extra checkbook that instead of saying, you know Shannon on it, it says golden mountain on Monday. And it’s really that simple. And if a lawsuit kind of comes on the horizon, then you’re gonna call trust day law firm. And we’d say what do I need to do? Let’s make sure all the i’s are dotted.

Shannon Robnett  33:43

So the reality is that once the complex the complexity of digesting my organization, and putting it down on paper and putting each thing in its own protected little box, we set that aside. And all the money flows from the irrevocable trust to an entity that is the holder of the equity, golden mountain and in the case that we’ve been talking about today, and from their distributions come to me, so it really isn’t, like I said, it’s not complicated. It’s just not easy.

Kevin Day  34:24

It’s not easy to get your arms around it.

Shannon Robnett  34:28

But or through it, or over it.

Kevin Day  34:31

Exactly. To operate it. Actually, everybody is astounded. We get unsolicited all the time.

Shannon Robnett  34:40

And that’s really where I’m finally coming to the other side of the conversation where I understand that Okay, once this because, you know, even with, even with LLCs I mean, you’ve got meeting minutes for every LLC every year and you’ve got, you know, you’ve got the different credit card for each one and you can’t commingle funds and you’ve gotta pay this. And so maybe you’ve got a holding company where, you know, the holding company, you know, pays the bill and then sends a bill out to each LLC and each LLC writes a check, I mean, that can get very, very complicated and very cumbersome to operate. That’s just kind of, you know, you’ve got 25 properties. So you’ve got 25 checkbooks, you’ve got 25, bank balances, you’ve got all these things. Whereas what you’re talking about, one set up is much, much simpler than that. And it has a lot more protection to go with that. Now. When the irrevocable trust owns it, and I want to sell it, or the lie, I don’t want to sell it, I couldn’t say that in court, the irrevocable trust decides that they want to sell it, I just show up as the agent and sign the papers,

Kevin Day  35:50

You can do it that way. What we, you’re still running the LLC that holds the real property, and you want to run the sale, and through escrow the profits goes, golden mountain lending, just like Bank of America is going to get paid. And then on your next project, is going to borrow from golden mountain lending into a new LLC that starts a new project.

Shannon Robnett  36:19

So Kevin, you know, really, what you have outlined here is something that can be done. And probably sooner rather than later, because of the complexity of trying to sort out 65, or 75, or 100 different entities and stuff. Whereas if you just call up and say, Hey, Kevin, I got another property, it’s 124 Forest street, you say, “great, let’s call it 124, forest Street, LLC.” Now we just throw that on the shelf with the rest of it. And we just keep adding, and we keep growing. So it’s something that even though like you said earlier, in the podcast, your only three houses are your you know, duplex and a triplex. That’s, that’s the great place to start. Because then you can just continue to add on to it, like Legos, where you’re continuing to build it out as you add assets without having to change anything,

Kevin Day  37:10

Right. And you can even simplify a little bit, we recommend, if the real lawsuit protection comes from the equity stripping the friendly liens, then you don’t need an LLC for every property. If you have an apartment complex, I’d put that in one LLC, but maybe five, or six single family residences in C, so you get to simplify a little bit.

Shannon Robnett  37:36

So then you’re doing a portfolio type package where you’re cross collateralizing, everything so that you might have $200,000 equity in each house. But now you’re throwing a blanket lien over it for this collateral for a million to the equity is gone, the payments are coming out to gold and mountain lending. And you’re able to just consolidate. So now you would have maybe your fix and flip portfolio, your single family portfolio, and your and your multifamily portfolio. So you could really simplify that I see where that would work. And so really, by doing the work up front, you could really simplify your life and move forward.

Kevin Day  38:17

Yes, yeah. And it’s scalable, that one lawsuit proof trust and the one privacy company, that piggy bank company, can equity strip, three properties, or 130. Yeah.

Shannon Robnett  38:32

So now we, I wanted to get through all that so that I can understand it. And that’s a lot of groundwork guys go feel free to go back and listen to that again, because it’s really quite simple once it finally clicks in your head. But now we have. So this is all done.

Kevin Day  38:47

We have a white paper that explains it. Okay, answer 100 more questions. It’ll drum up 30 others. Oh, that’s what we’ll be glad to send. 

Shannon Robnett  38:56

So, what you’re saying is don’t read that at nine o’clock at night because the sheep will be asking questions all night. So, guys, if you want that information, shoot me an email at [email protected]. And just type in the subject line, Kevin Day, we’ll get you over that white paper. And that will be a valuable asset. But we just talked about domestically, we’ve talked about all of these things being in the United States. Now the problem with all of that, Kevin, is the IRS likes you to win your domestic. How do we do you work with people to help them get those assets in those companies and those holding companies and those profits offshore?

Kevin Day  39:40

The rarely, there’s only a few tax advantages and we have banking connections and we form companies all over the world for various needs, but to be IRS compliant and have a tax advantaged structure. You know, there’s people with Millions and millions of dollars that have followed the law. And when too many people do on they close the column loopholes, but it’s the law. And you know, one of the biggest thing is having an active business internationally, and very few people are going to be in that position, particularly real estate investors unless they are willing to get familiar with an international market, then you’d have what’s called a controlled foreign corporation, IRS causes the CFC. And you report the taxes but don’t have to pay taxes until you repatriated. And that’s, and you don’t you personally don’t have to necessarily leave the country to do that. Then we also have tax and treaty jurisdictions that you’re very familiar with that give us citizens tax advantages.

Shannon Robnett  41:03

So when you when you hear people talking about, you know, offshore trusts and offshore holdings, why would you if there’s very little what we just described, there’s very little tax advantage to that, why would someone want to have their holdings offshore?

Kevin Day  41:21

Right, because one, the Hague Convention, on trusts, essentially says that we recognize the trust law of these other countries and their jurisdiction over the trust. And it’s recognized in all 50 states, it’s recognized by the IRS, we’re not getting you in trouble, there’s actually a form for these things, which you want, it’s part of the defense file. But somebody’s suing it trying to bust it, they’re going to have to fly to the Isle of Man or Cook Islands or Montserrat, wherever we end up putting this trust. And the rest of the world is not a loser pays, everybody else is a loser pay system, the US is not so you sue somebody and you lose, you just walk away. You know, with the attorney fees you pay the rest of the world says if you sue and lose, you have to pay the defendants fees and costs. Some of these jurisdictions not all require the plaintiff to put up a cash bond in the amount of the expected defense fees and costs. And they need to sue under that country’s laws were so lacks here. And so the domestic versions, there’s only 15 states that have passed these copycat laws, only about five of them have any teeth in them. So you have issues if you’re being sued from somebody in a different state that doesn’t have the trust law, and you’re using the trust law of another state, although it’s legal, those are extra issues. And crazy things happen in our legal system. That’s why people have to take it into their, you know, their own control and get educated on this.

Shannon Robnett  43:09

So really, what you’re doing is you’re taking the previous lead discussed air revocable trusts, putting it in Alcatraz that has his I mean, really, I mean, Cook Islands, you’d have to go you’d have to physically fly to the Cook Islands, hire a Cook Islands attorney to litigate this process. And then the Cook Islands has a completely different compensation idea that if if you don’t win, then you not only it’s it’s not a in the US if if you don’t win, then I have the right in the ability to sue you for my attorneys fees. But then that’s a whole nother negotiation. That’s a whole nother thing. It’s not that you are automatically awarded in the Cook Islands, you’re automatically awarded. I just turned in my bill for the attorneys fees you lost. Now you pay me, you know, $700,000 for my attorneys fees and all the costs.

Kevin Day  44:09

Yeah, the courts actually collect that money in advance. They say we don’t want you making a mockery of our system. You lose, you fly back to America, we want we want you to empty up cash. Right? Right. So

Shannon Robnett  44:25

what percentage of your clients need that additional layer of protection?

Kevin Day  44:32

I used to have what people would typically ask it. How big does my estate need to be? Right? And I would avoid that because unless we’re doing something tax advantage, it’s really about, you know, protecting what you’ve so worked so hard for and so I avoided it for the first 10 years of my practice and I’ve been in 30 Plus Let’s now. And I finally realized what my clients were selecting. And if they were over $4 million, they tended to go with the offshore trust. And if you’re under two, you go with a domestic. If you’re between two and four, then we slow down on the education and look at the pros and cons. how rapidly Are you growing? How high liability business do you have to see whether it’s worth the stretch to go international. I contemplated this and it took me a couple of years to figure it out. And I remember, you know, my dad was a sixth grade school teacher, you know, I’ve got 25 and 28 employees, you know, now, and I’ve had big firms and things are nice. But I started with $500, in my bank account, and I started getting huge and sweet. And I remember when you get to about 3 million, you bought the upgrade car, you’ve started to go on nice vacations, and you realize that even if I don’t make any more money, I can live a decent life. That’s when the light bulb goes on, that it’s so critical to pay attention to the lawsuit protection side, not just the wealth growing side, if you’re smaller, if you’re a business owner, or you’ve had some little lawsuit insurance took care of it was $15,000. But you realize how much stress and how easy it is anybody can sue you for anything. And those smaller states are alert to it, we won’t be for them.

Shannon Robnett  46:46

Yeah. So Kevin, this has been really, really enlightening. And I think I’ve got, you know, all kinds of thoughts and stuff going through my head about, you know, what about this, but you know, what, we need to kind of wind this down, because I can go on for a long time about this, which is, you know, I kind of liked these rabbit trails. But if you had one piece of advice for my listeners that, you know, looking at what we think we know versus what we know, versus our conversations today, what would be that one piece of advice that you would tell people

Kevin Day  47:24

right out of the gate. Two things, one, get educated, you might not be putting structure in place, you know, I’ve got X amount of dollars, I’ve got something under contract, I can’t put a structure in place, but get educated. So that when the timing is right, you go, Oh, I need to get back to that guy that Shannon introduced us to. The other thing is, we do a roadmap, if it’s 350 bucks, it doesn’t cover the amount of time we put about 800 $800 worth of hours into it. But we customize what your structure is now. What the structure would be perfect for if money was no object, and what are the baby steps to get there. So you’re not just willy nilly being adding LLCs and and you’re throwing things away down the road? It’s not as streamline. So the roadmap is an efficient way to imagine the future that you want and slowly build toward it.

Shannon Robnett  48:34

Yeah, well, and that’s exactly you know, that’s exactly why I started on this journey with this podcast is not because I didn’t have anything to do with my afternoon, it was because the educational piece that, you know, being able to speak with guests like yourself, and and you know, Dave Zook and some of these others that are really high power people that really know what they’re doing that really have their niche and their specialty under control, to give that education. So I really love the fact that education is really what you’re leading with. But I’m going to add to that, guys, I’m going to tell you that lawsuits are not cheap. Okay? I’ve been involved in a couple, not my fault. But even when it wasn’t my fault, it was somebody else’s fault. It still cost me a lot of money to defend myself. Because at that particular time, I did not have what Kevin has been talking about. So you really want to take the time to invest in your education and you want to invest in asset protection before the lawsuit happens. Because if you think for one minute, that asset protection structure is expensive. You clearly have not been involved in a lawsuit. Those my friends are expensive and nobody wants those. But Kevin, I really want to say thank you for being with us today. Because you brought an angle you brought and obviously your life’s work has been about this, but you brought something to my listeners that you don’t hear all the time. That is going to give everybody He paused and I really want to go back to the white paper that you offered, guys connect at Shannon robinette.com, we’ll get you a copy of that white paper, we’ll get you connected with Kevin Day. And I completely agree with what Kevin said that you need to start now. And you need to get that roadmap so that you’re not adding on the wrong things or doing the wrong things. But Kevin, I can’t say thank you enough for spending your afternoon talking with us. I really appreciate the knowledge you’ve given us.

Kevin Day  50:26

I always have so much fun with you and thank you very much. And I know it’s, it’s not the most heartening subject. It’s so much more fun to learn the things to make more money, but spending a little bit of time on how to keep it is important.

Shannon Robnett  50:44Well, and that’s that’s always you know, again, that’s that preventative maintenance, right? You don’t know that you’re really making money when you’re working with your asset protection attorney because you’re protecting yourself from that. And when your mind is occupied with a lawsuit, you’re not in your regular space and you’re not doing what you could, right. Yeah. So guys, thanks for tuning in to Real Estate Rundown. Don’t forget to like, share, and subscribe to the real estate rundown wherever you get your podcasts, leave us a review. I’d love to hear your feedback. And if you want that information that white paper don’t forget, connect at shannonrobnett.com. Other than that, you guys have an amazing day.

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About Kevin L. Day:

Kevin L. Day is one of the leading estate planning and international asset protection planning attorneys in the United States. Mr. Day’s Bachelor’s Degree is in Chinese Studies, and he holds a Master of Business Administration in International Management and Doctor of Jurisprudence degree. He was a university academic administrator for eight years, a law professor at the doctorate level, and a law school Dean of Students before entering private practice. In addition to his legal expertise, Mr. Day brings his extensive business knowledge as an MBA in International Business to his law practice.

Mr. Day is admitted to practice law in the California Supreme Court; U.S. Southern District Court, California; U.S. Court of Appeals, 9th Circuit; U.S. Central District Court, California; U.S. Court of International Trade; U.S. Tax Court, Washington D.C.; U.S. Court of Appeals, Federal Circuit; and United States Supreme Court. Mr. Day is a member of the California Bar Association, the Offshore Institute, the International Tax Planning Association, and the American Bar Association’s sub-section on Asset Protection.

Attorney Day is the co-author of four books: Lawsuits, Taxes & Asset Protection, Offshore Money Strategies, The Privacy Guide and the Ultra-Privacy Guide. He has also co-authored five audio-courses: Offshore Tax Havens, International Asset Protection Trusts, Golden Parachutes for Business Owners, Offshore Money Strategies, and How To Disinherit Uncle Sam. Additionally, he has written many articles relating to estate planning, offshore tax havens, asset protection and captive insurance formation.

Email: [email protected]
Website: https://www.trespday.com/