Asset Protection Strategies with a “Trust Sandwich”

I bet you never thought your business and investments would look quite like this. The business changes, real estate crash, and credit meltdown have rattled the whole country. It’s also given you a real opportunity.

It’s a chance to examine what is most important. This is the time to catch your breath and look at everything in a new light. What is most important in your life? What do you want to be known for? Business is coming back. It’s up to you if, this time, you do it in a way that gives you freedom, control, and fulfills your truest purpose with integrity and value.

And, with all the changes coming about in this economic climate, flexibility is the cornerstone of every strategy. That’s why I love the Trust Sandwich. The layers of the Trust Sandwich allow you to select the state law you like, provide estate planning, maintain flexibility for refinance, AND protect your assets. I think this latter might be the most important.

There are bad guys out there who are looking for someone to blame for the market conditions. And you’re as good a target as anybody.

Flexibility and protection with the Trust Sandwich

Fannie Mae came out with new rules about a year ago regarding refinancing. They said that you couldn’t refinance if the property you were refinancing had been held in another entity with the past six months. So, if you’d been protecting your assets like I always encouraged and had your property in an LLC, you’d be out of luck.

So that meant you were left with three choices if you owned real estate:

  1. Never refinance. But what if you want to take advantage of better loan terms? You’re out of luck. You can’t.

  2. Go bare. In other words, just hope that no one ever sues you. Yikes. I don’t recommend that to anyone.

  3. Use the Trust Sandwich. It’s a layered structure system, so you get the asset protection of an LLC, but it’s within the layers of a special kind of trust. This trust allows you to refinance without a problem due to the asset protection.

IRS Says NO to Limited Partnerships

The answer? A Trust Sandwich. The IRS is currently denying real estate losses to anyone who had property in a Limited Partnership. The Trust Sandwich came to the rescue again. You can prove material participation (one of the things the IRS is looking for) through the Trust Sandwich when you cannot as a limited partner in a Limited Partnership.

The theory behind a Trust Sandwich is simple. Because the top layer is a trust, you get maximum flexibility and mobility for state tax purposes. And because there is an LLC in the middle, you get phenomenal asset protection.

Combine it with a Series LLC and you have a powerful asset protection and tax saving tool.

The secret for prospering in uncertain times is focus and flexibility. More than any other time, your business and financial strategies need to have both. For flexibility in business structures, the Trust Sandwich is the best thing going.

[Those are just a few of the strategies that you’ll hear about in Diane’s 4-module audio program complete with written manual.]

Changing Times Require Changing Structures

Want more information and advanced strategies? Then you definitely want the Trust Sandwich home study program.

About the Author:

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A content contributor to the original CREOnline.com.