Asset Protection: The Iron Triangle

An Iron Triangle is an alternate method of asset protection, from real estate to even art. It is a complete solution which cannot be penetrated by lawsuits, IRS, or divorce courts. With an increase in the property value and an increase in lawsuits and divorce settlements, the triangle is an ideal solution for many income levels.

This system involves incorporating three entities: a “No Asset Corporation,” a Limited Liability Corporation (LLC), and a beneficiary-controlled trust.

A beneficiarycontrolled trust is a trust created by a person other than the beneficiary and requires another entity as a distribution trustee. The beneficiarycontrolled trust owns the assets. It also owns the company that executes the trust. The trust has the right to purchase property, pay for education and medical expenses, and other expenses as specified in the formation of the trust. If you are the beneficiary, you can control and remove the distribution trustee at any time.

The beneficiary trust owns 99 percent of the Limited Liability Corporation, which is responsible for paying your office expenses, travel, fuel, computers, and much more. The LLC should be the owner of office vehicles, computer printers, copiers, and other office assets. This is the entity from which one actually earns income from his or her assets. The Limited Liability asset is managed by the “No Asset Corporation,” which employs the beneficiary. The “No Asset Corporation” can pay the beneficiary’s life insurance, retirement benefits, and medical insurance. The “No Asset Corporation” owns nothing except a bank account and a check book. It is employed by the LLC as a manager.

As an employee of the “No Asset Corporation,” one is entitled to all business-related reimbursement such as travel, fuel, telephone, business entertainment, and more. Never reimburse personal expenses, as this will make you personally liable for any debts incurred by the company. The “No Asset Corporation” and the LLC work hand-in-hand to protect assets. These companies also give protection from loans collection, court cases, the IRS, divorce, and lawsuits.