By: Mark L. Dodds, Esq., Partner at Grant Morris Dodds
We often receive inquiries from clients looking for asset protection services who wish to achieve greater anonymity regarding their assets, including real estate, investment accounts, business holdings, and so forth.
It is important to understand that “hiding” assets is not a valid principle in asset protection. In the event a person is sued and has a judgment rendered against him, he may be put under oath in a debtor’s examination and, under penalty of perjury (a felony), he must disclose his assets to the questioning authority.
So merely holding assets in a name not readily traceable back to you should not be viewed as a good way to protect your assets. Nevertheless, keeping a lower profile, maintaining privacy, and generally avoiding the spotlight are viable reasons for obtaining anonymity, at least for certain people.
The first and simplest approach to anonymity is to give names to your trusts, partnerships, LLC’s and corporations which have no resemblance to you and would not be easily traced back to you. General partnerships and most trusts are not registered with the State of Nevada, so titling an asset in a trust or a general partnership may prevent someone from tying the entity back to you. However, if you are the trustee of your trust, then your name appears on title. To avoid this, you could enter into a “nominee” agreement, making someone else your trustee, but you would have power to remove them at any time. Regarding real estate, you can record a deed in the name of the trust, omitting the trustees’ names. Generally, investment account records are confidential, so hiding the trustees’ names is not nearly as important as with real estate.
What about using LLC’s, corporations and limited partnerships to achieve anonymity? When these entities are formed, your attorney can sign the organizational papers which are filed with the State of Nevada, and you may use your attorney’s, or some other unrelated party’s, address for the entity. For a limited partnership, you will also need to name an unrelated person as your general partner, because the general partner must be disclosed. Similar rules apply to LLC’s (i.e., disclosing managers of LLC’s, or officers of corporations). Again, if you can use unrelated parties in these roles, you can keep your ownership of the entity private and anonymous.
One additional problem to be aware of is this: if you convey real estate from you to an anonymous entity, a records search can show your conveyance of the property to the entity, thereby providing an easy way to tie a supposedly anonymous entity directly to you.
If the assets are located in Nevada, perhaps the best tool for achieving anonymity is the Series LLC. If you are interested in utilizing the Series LLC for this purpose, you may want to give us a call at 702.938.2244 and schedule an appointment.
Achieving anonymity may be worthwhile, but it is not easy and is not foolproof. Nevertheless, for those who are concerned with achieving a certain degree of anonymity, there are techniques to reduce your exposure to unwanted attention.