Protect Your Idenity: Protect Your Assets: Privacy & Safety

#3 in a series of 3

Two articles ago, we learned how to acquire assets without disclosing our identity.  In the last article, we learned a new technique to acquire assets without exposing the remainder of our property to the liabilities of our new asset.  In this final article, we are going to put it all together.  We are going to acquire assets with both privacy and safety.

Let’s return to our investment in a large yacht, which we will also charter out for income sometime in the future.  If we don’t want those who prey on yacht owners and creditors to know we own a large yacht, we will use a trust to acquire the asset.  We do this by entering into a trust agreement with a trusted associate, attorney, or other agent, who will take legal title to the yacht, subject to your beneficial rights in the trust agreement.  Your beneficial rights include acquisition, management, and disposition decisions regarding the yacht.  As we shall see below, you may take these beneficial rights directly, or later through a limited liability company, of which you are the single member.

Your trustee is not obligated to tell anyone that you are the owner of the yacht, short of a court order.  If a lender or other party is involved in the transaction, be sure and have them sign a confidentiality agreement, so as not to disclose that you are the true owner, since they will obviously need to see your financial state and other matters, and not your trustee’s, for financing purposes.

In the event you later decide to charter your yacht, and your yacht goes down with America’s favorite family aboard, you will want to have limited your liability to the value of the yacht, rather than jeopardizing your home, business, stock, bonds and other assets.

Last week we learned that California has recently enacted the single-member limited liability company (LLC).  We are going to set up a single-member LLC through the California Secretary of State.  We are going to “capitalize” this LLC by having the trust transfer the yacht and the necessary money to insure, maintain, and pay registration and taxes for the yacht for a reasonable period in return for the single membership interest in the LLC.

The trust, not you, will be the single member (owner) of the LLC, thus insulating your other assets from any potential yacht liabilities and insulating your personal identity from ownership in the LLC (yacht).

You need to create an operating agreement for the LLC which will cover areas such as (1) who will manage the yacht, whether you, as the single-member, or perhaps a charter company, (2) initial and additional capital contributions and distributions, (3) death or other transfer provisions, and (4) insurance provisions.

Liability and casualty insurance will be necessary to avoid claims by others that your LLC is really a sham, or “alter ego”.  In this regard, you will also need to set up and maintain separate LLC bank accounts, books and records, so that you do not commingle your other assets and funds with the LLCs.

By following the above planning, you will be able to obtain new assets, even fairly risky ones, without compromising your privacy or unduly risking all of your other assets.

As always, consult your trusted accountant and attorney with respect to your individual circumstances.  This article has been prepared for informational purposes only, does not constitute legal advice, and is not guaranteed to be correct, complete or up-to-date at the time that you read it.

I hope that these last three articles have been helpful to you in planning for your future assets.










"Okay, thanks for the idea ... I'm going to try it."

Who We Are

Image of Bruce Leonard Beal

The present firm arose from Bruce's move from the Los Angeles area to Dana Point, where he and his wife wanted to live since they first  discovered it. 

Bruce comes from the Senior Counsel position in a large world class international technology, engineering and construction corporation with thousands of employees, hundreds of large clients, world class projects, hundreds of affiliates, and complex transactions and litigation.  Before that, he gained significant major law firm experience, including arguments before state appellate and supreme courts.

His desire in moving to Dana Point was and still is to bring his world class experience to smaller and emerging businesses in the area.  This experience produces more valuable legal and business judgment from him than is available from newer attorneys or attorneys whose practices are more specialized and localized.  His extensive Resume is here Résumé.

Marlene wears all hats other than "Lawyer" in the firm,  including Paralegal, Marketing, Accounting, and Office Management and Assistance. Her extensive Resume is here Résumé.

Disclaimer: The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of my knowledge as of the date of the article. I have no duty to update this article. The information, examples and suggestions presented in this article have been developed from sources believed to be reliable. This article should not be viewed as a substitute for the guidance and recommendations of a retained professional and should not be construed as legal or other professional advice. In addition, I do not endorse any actions addressed herein, unless they are produced or created by me.  I recommend consultation with me or other competent legal counsel and/or other professional advisors before applying this material to any particular factual situations.