5 Mistakes That Are Destroying Your Asset Protection Plan

Josh: Hi. How are you, Toby?

Toby: All right. I’m alive. I’m kicking. Can’t be complaining here. You’re from the beautiful state of Utah. You’re sitting up there in Draper, I think

Josh: Actually, I was exiled to the desert. Bowman had me in the Draper office, and then he came into the Draper office. He’s like, you get out, so I was exiled to eastern Utah. I’m over by Arches National Park, but I like it here.

Toby: Oh, really? Oh, man. How is it over there? Is it beautiful?

Josh: It’s lovely. My house sits at just over a mile an elevation. My family’s out here. My wife’s from the city, so I had to ask her several times as we were moving. I was like, are you sure you’re okay with this? She said, yes, I’m sure. I’m like, okay.

Toby: You have a beautiful area if you’re by the Arches. That’s the most famous image, I think, from that National Park, right?

Josh: Yeah, it’s awesome. It’s great.

Toby: All right. Let’s talk about stuff that’s not so great. Let’s talk about the ways people mess up their asset protection plan. When I say mess up, I mean, undo them. They think they have something that’s going to protect them and they manage to screw it up.

They snatch defeat from the jaws of victory. I think it was my beloved eagles that managed to do that on one occasion. Let’s just see what these folks did. Let’s dive in.

I know we’re going to go over five. I won’t list them out yet, but I’ll let you go through them one by one. What was number one? What was the first thing that came to mind when I said, hey, Josh, let’s do a podcast on how people mess these things up? What was the first one you thought of?

Josh: The first thing that came to mind is the first thing that I talk to a lot of clients about when they asked me, how should I best set this up? I always say, what do you want to do? Because depending on what you want to do, there’s going to be a different structure for that. There’s going to be a different way to do it.

In one word, objectives, is the thing that came to my mind. What are your objectives? If you understand your objectives, myself, the other advisors, the other attorneys, we can work with you to put a structure together that will help you meet those objectives. But if you don’t know what your objectives are, you’re going to blow it.

Particularly, the first story we have comes out of Montana. What happened was there’s a family, as there usually is. Two families, and they’ve got into a fight over land. One family sued the other family, and that family counterclaims against the first family. Let’s say we have the Joneses and the Smiths.

Toby: The lawyers are involved and lawsuits are flying. Two families and land is at issue, right? They sue each other for what? To take each other’s land or is it to acquire title?

Josh: To take property.

Toby: They have to take something from somebody based on a theory of liability. The person who’s getting sued doesn’t like it much so they counter sue, but there’s probably exposure here. I sense that there might be a not-so-happy ending for one of the parties. Tell me about it.

Josh: There’s not. What happens is the Jones family who initiated the case, they were the plaintiffs in the first case. They lost. Now, how they lost is really immaterial for our purposes today. What happened was it was a default judgment, meaning that Jones sued Smith, Smith countersued, Jones never showed up. Jones didn’t do what they were supposed to do.

Toby: Jones threw a punch and then wasn’t prepared for what came back at them and never responded.

Josh: Exactly. Jones defaults. Smith Goes to collect on the defaulted judgment. Jones panics. Jones has the land, an issue in this case. What they do is they hear, oh, I’ve heard about these wonderful tools called domestic asset protection trusts. The idea is you transfer property into this domestic asset protection trust. The way that the trusts are written, there’s no liability, meaning outside creditors can’t come against the property in the trust and take the property away.

Jones thinks this is perfect. I’m going to do this. Lots of problems with this, the main one being that there was already a judgment entered for Smith. Smith was a pre-existing creditor.

Toby: It’s like a fire alarm. It only does you good if you have it installed before the fire. Your asset protection plan has to be installed before there’s liability or they’ll do something called a fraudulent conveyance and say, you’re toast. Is that what happened here?

Josh: That’s exactly what happened. We went through all this legal wrangling. The court came back and said, we’re clawing the property back. That’s what it’s called in the law. It’s called the clawback. We’re clawing the property out of the domestic asset protection trust, because there was a fraudulent conveyance, and the property goes to Smith, and they won the case.

Exactly because of what you said, you didn’t have it installed previously. If we change one fact in this scenario which is timing, the whole thing resolves differently. Why does this tie back to objectives? Their objective was to protect the property.

Had they come to us or somebody like us before any liability had attached and said, I heard about this, is this a good option here, we could have said yes or no, explained why, and then set them up with the best option. It may have been a domestic asset protection trust. But the way they did it, they did it perfectly backwards and ruined it.

Toby: So right answer, but unfortunately, too late. It’s like, hey, I have a car, I should have put oil on it. I know that the oil will keep the engine from seizing up, but I just drove it 100 miles, and then I put the oil in it. It’s probably too late. The engine seized and you’re toast. The courts do not like that.

They do not like the transfer of assets after there’s exposure. Even if you know you’re going to be liable and you do stuff, you haven’t been sued yet, it doesn’t matter. If you know that there’s a creditor out there and you try to remove something from them and put yourself in a position, was there a bankruptcy involved in this? Did they make themselves insolvent? Were there any other assets?

Josh: I think there was a bankruptcy and an insolvency issue. This just exacerbated it. Even without the bankruptcy, the way that the court was ruling, it was going to go the same way, but they made it worse.

Toby: The reason I bring that up is because some folks think you can’t transfer assets when you have creditors, but you can as long as it doesn’t make you insolvent. As long as there’s enough there for that creditor, you can usually do something. I think your point is well taken, sir. That’s number one. Make sure you have your objective set up, and make sure you’re timely.

I’ll add that one in there for you is they are first in time, first in right. You have to make sure that you’ve conveyed that thing before there’s liability exposure. It’s the same thing. If you’re a landlord, you want to make sure you have your property isolated before you have tenants or you have exposure, because the second you do, it’s going to be too late. All right, what’s number two?

Josh: Number two is anonymity. Anonymity is one that you preach a lot. The security through obscurity doctrine, which I really like. If people don’t know what you have, if you’re anonymous as an owner, they can’t take it away from you. It’s very difficult for them to take it away from you.

Toby: You don’t see a lot of homeless people being sued.

Josh: Not a lot. No, it’s very rare.

Toby: We don’t think they have anything. You don’t want to look homeless, but you want to look like you don’t have anything. That’s why they’re not getting sued because there’s no reason.

Josh: Pretty darn close. That’s right. The best example from popular culture is mainstream news. A recent memory was the Black Lives Matter executive or person that worked with that organization, Patrisse Cullors.

Now, I’m not making a statement on her politics or her ideology. I’m just saying that she bought some properties that got tied back to her. It caused a big stir and a lot of problems for her because there were questions raised about propriety that she used money that was supposed to be for Black Lives Matter. Did she use her own money? We couldn’t really tell, and the whole thing.

It was really avoidable. All of these tie together, but it ties back to, what are your goals? What are your objectives? What’s the timeframe that we’re looking at? And how is this going to be perceived in the larger public? Because for her, it was perceived very badly. It was very easily avoidable. Use a land trust with a trustee LLC, use a land trust with a beneficiary LLC. It was more than easy to avoid.

Toby: It’s more than just her. There are other members of the BLM Movement that I think got themselves in hot water, because people just go out there with their LexisNexis, type it in, or do a property search and they can see all the property. So like, oh, wow, you bought four multimillion dollar properties in the last year. You’re doing well. What are you doing besides taking money from a nonprofit? They’re asking questions.

If they had just kept it private, nobody would have known. Nobody would have ever been able to tie it back to them. Maybe they see them driving there and they say, what are you doing at this property? We can’t tell who owns it. That’s about as deep as it’s going to get.

Josh: She didn’t have to draw that attention to herself, nor her colleagues. All of this was completely avoidable. It was totally avoidable. We know it’s avoidable because we do it all the time. We set people up with this all the time.

Toby: How do I keep somebody from knowing that it’s my house? If I’m sitting here today, and I don’t want anybody to know where I live, or I want to keep my name out of a public record, how do I do it?

Josh: A couple of ways. The easiest way that will work in every jurisdiction is using a trust. What you do, you create a revocable trust. We call it the primary residence trust. Previously, you would have heard us call it a land trust. There are some weird legal things that go on there, so we’ve just changed to calling it a primary residence trust.

It’s a grantor trust, meaning that when you transfer your property into it, there are no taxable consequences. It doesn’t change the basis, it doesn’t do anything. You just transfer your property from your name over to the name of the trust.

Here’s the key. As soon as you transfer the property into the trust, you will amend the trust. Now, when you transfer the property from yourself to the trust, you’re going to have to name the trustee that is managing the trust for you, the grantor, the person that set up the trust. As soon as you do that, though, you can amend the trust privately out of the public eye, and you don’t have to re-register the deed to the property.

Now, why is this important? Because when somebody calls you up as the trustee of this trust or whomever, maybe it’s Clint, maybe it’s another attorney, they’ll say, you’re the trustee of this trust, and I need to sue the person or I need to know the information. You say, no, I’m not. And it’s true, you’re not.

Toby: Can I just use an anonymous ownership entity, like an LLC or something like that, too?

Josh: You could. The trouble with that is in many states, you’re going to sacrifice tax benefits tied to you owning that home in your own name that you get from the state for having a primary personal residence. One example is how those are taxed. Most states have a homestead tax exemption.

There’s a different homestead exemption that we’re going to talk about in a little bit. But specifically, they’re here. There’s a homestead tax exemption where only a certain percentage of the home’s overall fair market value will be taxed. Whereas for commercial properties or properties that aren’t used as primary residences but are used for investment purposes and as investment vehicles, they’re taxed higher.

That is a big benefit that you could lose by putting your home into an LLC. For anonymity purposes, yeah, it would absolutely work at the sacrifice of something that can probably be more beneficial for you. Could you do it? Yeah. Would we have you do it? No.

Toby: Fair enough. How about the next one? What we have is number three. What’s another big area that you see people messing up that just blows up plans?

Josh: This one is huge, and it hits home for me for two reasons. This is compliance. Specifically in regards to cash flow, but compliance generally more broadly. When you set up an entity, you have to make sure you comply with two things.

First thing, comply with the regulations for the state where you created the entity. You’re going to have to file regularly. You’re going to have to make sure you have a registered agent. You’re going to have to make sure that you have a bank account. All of these things are important.

The second thing that you’re going to want to comply with are the internal documents that you have and that you have filed. With an LLC, we’re talking about an operating agreement. With a limited partnership, we’re talking about a limited partnership agreement. With a corporation, we’re talking about by-laws. You have to comply with your internal documents and with the state.

Here’s why this hits home for me. There’s a case out of Utah that just came out recently about Grandma Sycamore’s bread. Toby, I know you live in Las Vegas. I don’t know if you’ve ever had Grandma Sycamore’s bread. It’s the only bread my family eats. It’s delicious.

Toby: Grandma Sycamore’s bread.

Josh: Grandma Sycamore’s bread. I’ll send you a link. It’s fantastic. Grandma Sycamore’s bread. A guy named Leland Sycamore here in Utah over in Utah County started baking bread. It was really good. People really liked it and started marketing it.

It did so well locally that Bimbo Bakeries, one of the larger bakery manufacturers and distributors for baked goods in America, got their attention. They bought his brand. They bought his brand, they brought his distribution, they bought everything.

Toby: For a lot of dough, no pun intended.

Josh: For a lot of dough, so much dough. Part of the deal was Leland, you don’t get to bake bread anymore, at least commercially for 10 years.

Toby: Yup, a noncompete. Hey, I’m going to buy you out, but I don’t want you popping up and competing with me. You can do whatever you want. You can go get a McDonald’s. You could go and become a consultant for whatever, but one thing you can’t do is what? Bake bread and sell it commercially.

Josh: He cannot bake bread.

Toby: What did he do?

Josh: Of course, Leland started baking bread again. He didn’t even try to hide it. He just went for it.

Toby: How did you know that was going to happen? It’s like with little kids. Whatever you do, don’t come over here and touch this. They just can’t help it. They’re like, touch this?

Josh: That’s the first thing they do. This one? Yeah, that one. Don’t do that. It’s exactly what happened. He started baking bread again, and lo and behold, corporate lawyers descend from New York with all sorts of cease and desist letters, breach of contract filings, and several years of legal wrangling. Later, Leland thinks he’s got this thing beat because of language buried in an operating agreement for an LLC.

Here’s what happened. He sells his company to Bimbo Bakeries. They said, we’ll pay you, I think it was $2 million. He says, great. They pay his LLC. Now in his LLC, he owns a portion of it, his wife owns a portion of it, and each of his kids own a portion of it.

He starts baking bread again, not thinking that he’s going to pique the attention of Bimbo Bakeries. But he does, of course, as we’ve said. When he starts making money in his LLC again, he’s like, oh, no, I can’t take this money, because if I do, it’ll be a breach of the contract.

First of all, no. You’ve already breached the contract. But second of all, as you can probably tell, this didn’t work, because in the LLC operating agreement, there was language that said that all distributions from the company had to be pro rata, meaning that any money coming out of that company had to come out in equal proportions based on an individual owner’s ownership interest, meaning Leland owns 50%, Leland’s wife owns 50%. $100 comes out, Leland gets $50, she gets $50.

Leland thought that wasn’t the case. So he took a whole bunch of money and gave it to his wife, thinking, if I give it to my wife, that’s not me. My wife wasn’t part of this non-compete. She’ll be free and clear. They won’t be able to prove damages and I won’t be liable.

Toby: Let’s just distribute it all to her. It’s not me. Don’t look over here, it’s not me. It was really her, which is still silly, because you’re husband and wife. Let’s just put aside the silly arguments and the fact that somebody is acting in bad faith. What did the court do to that?

Josh: As soon as the attorneys pointed this out to the court, the court said, well, you got to get back coming full circle to compliance. You didn’t comply. Any distributions that were supposed to come out of this entity were supposed to go to the owners of the entity pro rata.

You’re an owner of the entity, you didn’t get your pro rata piece of these distributions. Therefore, we’re going to clawback—there’s that word again—the distributions, redistribute them as they should have been distributed. Therefore, you have damages that were approved for Bimbo Bakeries, and they won.

The court has enjoined Leland from baking any more bread, which of course, he’s absolutely going to violate again at five years unless he dies first. It’s just going to happen. That’s where we are right now.

Toby: He tried to hide behind an LLC in some legal language. I think this falls into the category that if you act too cute that there’s a good chance, and you don’t respect your entity, the court won’t respect it. If you’re playing around with things, they’ll find a reason to hang you by your toes. In this case, they were probably doing the assuming arguendo that whatever argument you made, Leland has any validity. Here’s what would happen anyway.

We’re just going to ignore this whole thing, and you’re responsible. We don’t have to get to the substance because even if everything you said was true and the distributions were just going to your wife, it doesn’t matter because your agreement doesn’t say that. What you did is you gave them the weapon with which to dispose of you with. Yeah, don’t do that.

How about honoring the agreements you sign? I don’t know. Maybe that’s what […] owed, but there are some of us that actually think it’s worth something.

Josh: Well, yeah, and it’s not. It really wasn’t that hard. I mean, he got his pay day. All he had to do was wait. He didn’t even have that much longer to wait, and he could have started baking again. It wouldn’t have been a problem.

Toby: He could have been baking, he just can’t sell it.

Josh: He just can’t sell it. The whole thing’s ridiculous. The whole thing with that case is ridiculous.

Toby: Maybe he was hard up for money or something. He didn’t know any other ways to make money, or was he just being conniving?

Josh: I think he was just being conniving and quite honestly, greedy. In my reading of the case, he had a bunch of real estate holdings that he tried to get involved with and some other things. Maybe it didn’t go the way exactly he wanted it to. They paid him a lot of money. Multiple millions of dollars for his brand. They do quite well.

Toby: It was his grandma’s in the first place, right? I don’t know that.

Josh: Exactly. It wasn’t even his. I don’t know.

Toby: All right, that’s the compliance side. Number four, I think it’s about education. What is that one?

Josh: Education is important for lots of things. You have the old saying that knowledge is power. As I was thinking about stories and anecdotes, ways that this has been implemented appropriately and inappropriately (maybe) but legally, nonetheless, the thing that stood out to me was OJ Simpson. OJ Simpson got into some trouble and was acquitted in the criminal trial against him for the murders of his ex wife and Ron Goldman, her friend.

Putting that aside, just not even speaking about that but just talking about the next case, where the Goldman family brought a civil suit for wrongful death against OJ Simpson, he was potentially on the hook for a lot of money to this family. They won the case, so he still has (I think) the base judgment was $33 million against him. As Clint talks about and as should be known more broadly, 10% interest on those judgments. Every year you don’t pay out, it compounds 10%. It has ballooned since then.

The thing that is interesting is that I don’t think OJ Simpson knew this. I think he had people that were working and helping him that did know this. He was informed as to how he could appropriately put his assets in a place where they wouldn’t be able to be targeted by the Goldman family and take it away from him, at least initially.

One of the first things he did, he moved to Florida. Why Florida? I mentioned earlier, the homestead exemption. There are two kinds, the tax and the liability or creditor protections.

Florida is one of the few states that has unlimited caps for your homestead value, meaning that except for voluntary liens like mortgages, any creditors that have a judgment against you can’t take your house away if that’s your primary residence in Florida. He moved there. Maybe not for that reason, probably for that reason.

Toby: They couldn’t touch his house, the equity in his house. I just want to stop you just for a second because people get tripped up on criminal versus civil liability. You can be found criminally not guilty, because the prosecution has to prove beyond a reasonable doubt. If you were alive during that time, you saw this trial going on for weeks and weeks. You had all the dream team and the glove doesn’t fit, you must acquit, and all that stuff. That’s the criminal side.

Goldman […]. That was just on the wrongful death for the estate of Ron Goldman, which was for his beneficiaries, his parents, I believe. They get this massive civil judgment. It was $30+ million against OJ. But OJ, it wasn’t just his house, was it? He had some other assets they couldn’t touch as well, right?

Josh: Right. You have the knowledge aspect of, oh, if I moved to Florida before this judgment has been entered, they can’t take my house. Great, that’s good, but that wasn’t his only asset. As most people know or knew—I wasn’t aware of this when it happened despite being alive then but I have learned since—he was a very impressive football player. He played in the NFL for the Bills and then for the 49ers, so he had an NFL pension.

You would think, oh, they could levy against that pension. No. A lot of retirement accounts for pensions, particularly pensions that have been established by these collective bargaining agreement agencies and organizations, are explicitly off-limits from creditors for these people that are involved in the pensions.

It’s not Just NFL pensions or professional athletes, either. Minors, teamsters, a lot of the Hollywood actors, SAG-AFTRA, one union of those people, they have pension plans just like we have retirement accounts at our employers offices or through our employers. The Goldmans can’t get that either.

Toby: Not only can you not go into the plan, but you can’t touch the distributions from the plan. You can live out your days on a golf course in Florida unless you’re the juice, in which case, then you’ll be compelled to come and commit crimes in Nevada and get incarcerated. I think he had a life sentence.

I just remember that there was supplemental proceedings. He couldn’t find his Heisman trophy or some of his memorabilia to sell, because the Goldmans are trying to levy on it. And then it made a cameo appearance in a video down at the palace station when he was holding people up. It’s just silliness where you’re like, this is what people do during lawsuits. They lie, cheat, and steal sometimes, and justice caught up with the Jews.

He’s still out here, by the way. My wife and I saw him over at the Vintner Grill in Summerlin. He lives maybe five minutes away from us here. He goes to the sports clubs. I know some of the people that interact with him. It’s always interesting to get their take on it.

My wife is from Colombia, so I’m trying to explain to her, OJ Simpson and the whole thing in the United States, and she’s just looking at me like, you guys are locos. This was a thing and I’m like, yeah, it was like a really big thing. There are racial tensions in the United States where a guy killed his wife. It’s beside the point.

Josh: Allegedly.

Toby: Yeah, right. The DNA evidence always says, but he was acquitted.

Josh: He was acquitted.

Toby: Right. We have to say that, but he was civilly responsible for the deaths or at least […] Goldman. I don’t know if Nicole Brown’s family took action or not. I’m not certain if they did.

Josh: That whole thing’s weird, but that’s the best example I could find of education. OJ Simpson had people working with him that said, hey, look, you have these assets that aren’t touchable. Knowing that allowed him to implement a strategy that allows him to live, what I would say is relatively comfortably despite legal issues.

Toby: Just like Leland, the only thing you’re not allowed to do is bake bread and sell it. They said to OJ, the only thing you’re not allowed to do is commit crimes across state lines. Please don’t commit felonies and you’ll be fine, and he just couldn’t resist himself.

Josh: He just had to do it. He was compelled to do the felonies. That’s right.

Toby: Some people. All right, the last one. We have one more way that people can manage to mess up their asset protection plan.

Josh: The last one is both understandable and lamentable. Come on, guys, this is why you get people like us. The last one is just tax. There are so many ways you could do this wrong, so many ways. The important thing to note is—and this all circles back to objectives—if you know (for example) that you’re getting into a business, you’re going to buy a property, and you’re going to rehabilitate it, you’re going to flip it, that is a different structure than I’m going to buy this property, I’m going to rehabilitate it, I’m going to rent it out and hold it long-term.

We have different structures for that. Very different tax implications involved in that. If you do the long-term buy-and-hold strategy with a property you know you’re going to flip, you’re going to screw it up. The main difference here is the difference between corporation taxation that we would use for a flip-type property situation and a disregarded entity situation, which we generally use for long-term buy-and-holds.

In fact, I can think of one exception to that that we’re not going to talk about today. An example of how somebody got this wrong. Now, we’re going to take the heat off of the real estate people for a little bit because this is a different example.

Toby: They were all getting nervous, Josh, and they were all getting worried like, oh, you’re going to talk about some messed up real estate tax, but you’re not, are you?

Josh: I’m not.

Toby: What is it?

Josh: Completely different. Tax case out of Michigan. A gentleman is getting into the business of reselling, scalping tickets.

Toby: Your friends are scalpers.

Josh: That’s right. You’ve all seen them.

Toby: Buy low, sell high.

Josh: That’s right, and they are very good at that. That’s what they live by.

Toby: And I hate them all. They drive me crazy here in Vegas. They like to buy up all of our tickets and then go on obscene markups.

Josh: It really is obscene. It’s very true. This gentleman starts a business, and he starts an LLC. It’s a sole proprietorship, that’s important. He buys tickets, goes out to the event, resells the tickets, and everything’s going good. Now, he made another mistake. He made two mistakes.

The first is he was doing his own taxes. He was preparing and filing his own taxes. That may work for some people, but it didn’t work for this guy. Whenever you start getting business taxes involved, that’s when you start looking at hiring somebody else to help you out. It’s going to be easier for you.

It’s an expense. It’s a tax deductible expense. It’s a tax deductible business expense, but it’s something you’re going to want to look for. Not only that, his son—I don’t know what his son was thinking—was like, I know what I’m going to do. I’m going to help out my dad. I’m going to get online, I’m going to incorporate the business.

He incorporates the business and—probably not knowing what he was doing—elects to have a business taxed as a C-Corporation. Now, if you’re watching this, you probably know. C-Corporation taxation and sole proprietorship taxation, two extraordinarily different beasts. Toby talks about this all the time. I learn most of what I know from Toby, so I don’t have to tell him, but I’m telling you. Very different.

Dad continues filing taxes like it’s a sole proprietorship, meaning all of the money that comes into the entity comes into his bank account, then tax deductible expenses are made, and then he keeps the profits. For a sole proprietorship, perfect. It’s exactly what he should have been doing. There are some differences that we could quibble with, but that’s okay f or a sole proprietorship.

For a C-Corporation, it is absolutely not okay. It needs its own bank account. It needs its own tax structure. It needs to be funded in a specific way. Everything needs to be different. He didn’t do it.

He keeps filing his taxes himself. He keeps doing everything that he’s been doing. Dad passes away. The family goes to file taxes the next year, and they get in hot water with the IRS because the IRS comes back and says, we’ve got some real big discrepancies here between what was happening before and what’s happening now. Explain these.

They tried their best to go back and recreate records and do all this, that, and the other, and it didn’t work out. They get hit with, for the IRS, a very modest tax bill, $15,000, which in the grand scheme of things, not a ton of money. It’s still going to hurt most families. It would decimate my family.

In the grand scheme of things, it’s not a Bernie Madoff situation or an Enron type situation where the IRS the SCC, everybody’s getting involved in wanting a piece of these people. It all could have been avoided if the dad got the notification from the state of Michigan and from the IRS that this was a C-Corporation.

He went back and started unwinding things, saying, no, no, no, we didn’t want to do this. This was done inadvertently. As unglamorous as it is and as difficult as it can be, you have to pay attention to the paperwork. You got to look at what’s coming through. You got to really sit down and see what’s happening. As long as you do that and are diligent about doing it, you won’t find yourself in these situations.

Toby: I would also put this one in the category of, if you ignore the fact that you need sound advice, these are things that are complicated. This would be on the same level as, hey, I had a toothache, so I decided to do my own filling. Then I infected the tooth, and it caused me to have a major health issue in my face, and it caused me to have to go through some surgeries and other.

Don’t do that. Don’t operate on yourself. Don’t do dental surgery on yourself. Don’t do legal stuff on yourself. Don’t do tax stuff on yourself because it’s complex. There’s some real basic stuff, and if you just ignore it, you’re just going to pay a lot more in tax. That’s the ramification. But if you start doing things that are complicated on your own without the guidance of somebody who knows what they’re doing, expect really bad results.

In fact, whenever I hear somebody went online and did something, I clerked for a judge and she said, it’s the interpretation of the presentation. Whatever her opinion’s going to be is the interpretation of the presentation. You always think of the presentation.

When I present something, if I’m presenting myself and I did an online deal, let’s say I’m trying to raise money from a bank, from an angel investor, or doing something with partners, and I show that, hey, I went online and grabbed something for cheap, what is my presentation and what’s the interpretation? The interpretation’s always going to be, you’re not a very serious person, you’re not really a business.

These folks do this over, and over, and over again. The ramification in the court is, yeah, whether it be the IRS, the courtroom, or in the boardroom, it doesn’t matter. You’re going to get the same result, which is you’re not serious. This is not serious. You didn’t do this correctly. Tax can just be so nasty.

I imagine they double taxed the heck out of them and treated all their profit as though it was taxed at the corp, which isn’t fatal in itself. But when you’re commingling monies and you didn’t pay those, the penalties and interest can be pretty monumental.

Josh: It all stacks and it’s not exclusive. The federal government doesn’t mess around. If they’re going to bring a case like this and they’re going to win it, they’re going to make you pay through the nose, and they did.

Toby: The moral of that story is that what you don’t know can and will beat the heck out of you, especially in the tax and asset protection world. In fact, I think that’s a recurring theme that we’re seeing. All of your scenarios were things that could have been avoided. The only one that I would say that’s the anomaly is the OJ story, because it did work, and it didn’t implode on him until he went off and did some intentional acts and caused himself some issues.

There were some things that you could do correctly and it protected it, and everybody else, they blew themselves up because of something they didn’t know. In all of those situations that you gave, if they had had good counsel, they would have avoided the nasty downfall.

Josh: Absolutely.

Toby: I think that’s a recurring theme. Hey, great. Great, interesting stories. Thanks for sharing the five ways people mess up their asset protection plans. If somebody needs to get a hold of you, Josh, if they watch this and they say, I really like that Josh guy, how do they get a hold of you?

Josh: You get a hold of me by contacting Anderson Advisors. The main number is a good place to start. It’s 800-706-4741. There’s my email address. I’m happy to answer questions if you have them. It’s jrobertson@andersonadvisors.com.

Toby: Perfect. I just want to say, thank you for sharing your time with us. Hopefully, you got something out of this guy. Share it with folks that you believe would benefit from it. If you want to get a hold of old Josh, you could always leave comments down below if this is on YouTube, or on our podcast channel, or you could send an email in. Thanks again, Josh.

Josh: Thanks for having me.