Thomas Handler recommends keeping about 10% of net worth in an asset protection trust.

[02:48]

"So at any time on Earth for the last 40 years there have been approximately 130 of those proprietary strategies on the market globe, globally, and very few people deal in this space."

[08:57]

"So what we have today considered the global best-in-class long-term wealth management strategy, those are not my words, however, this is a strategy that I devised, is a virtual family office, in most cases running one or more Family holding companies, and in turn, those Family holding companies are 100 owned by trusts."

[12:26]

"So at 10 you're not going to have your lifestyle, but you're going to have a house and a car and you'll be all right. I had a buddy, about 125 million."

Full transcript

I'm happy to be here. I was in New York earlier this week or it's frigid and I suspect when I go home to Chicago tomorrow, the same weather will be greeting me. But I have something in common with a brand new AI that we were just talking about. When a police officer pulls me over for speeding, I can also manufacture a story in a microsecond.

Uh, and I I firmly believe in obeying the laws. The speed limits are not among those laws. So when I talk about is a snippet of advanced planning, and in particular I'm going to deal with acid protection, the protocol, how it works, the elements that are make are most effective, what the approach and strategy should be, and then ultimately talk about the stealth prenup. So in doing so, you can think of advanced planning much like Maslow's need hierarchy.

For those of you who have sociology backgrounds, think of it as a pyramid and on the bottom you have a core or foundational level. That's where all the regular millionaires hang out. Those are the basic things that will a trust, auto policy with uninsured motorists, general home policy and umbrella, pretty vanilla stuff, but a foundation that you need to build. So there's a lot of stuff there and that's where the vast majority of professional advisors spend their time, because that's the biggest part of the population by far.

And, as you said here, which is Advanced planning, a little bit more sophistical, sophisticated, a little bit more impactful, and these things are a bucket of long-term wealth management strategies. They're, they're not all legal, they're yield enhancement, their diversification, their hedging, so on and so forth. And in that tier, the professionals that spend their life working for their regular millionaires, I don't mean that in a derogatory manner, also work at the advanced here, except they're outgunned and outmanned. And so the result is that some of these more sophisticated strategies are not being well implemented.

Some you're better off having than not having them, but the difference between doing it at a high level and doing at a low level is maybe 15 percent more cost for 40 percent more impact. So, and the core level, the best stuff on the street and the worst stuff on the street. There's not much bandwidth, it's all pretty close together. As you move the advanced tier it ranges from idiocy to neurosurgery and everything in the middle.

So as you move to the advanced tier, it matters how things are implemented. The documents matter across the t's, dot, Eis, the jurisdictions, a whole different protocol and then ultimately at the top of that is a place. It's very rare air and they're called proprietary or super Advanced strategies. So at any time on Earth for the last 40 years there have been approximately 130 of those proprietary strategies on the market globe, globally, and very few people deal in this space.

That's unfortunate because out of these strategies, when they work, and maybe only two or three apply to you in a lifetime, they deliver huge benefits, save your bacon or avoid a huge tax incident, so they're really impactful. Same thing: long-term wealth management kind of strategies. About half of those strategies fall into the open market and they're no longer proprietary, meaning the Investment Bank, the insurance company, the Trust Company, the multi-family office, the law firm, the accounting firm, the actuary firm, whoever invented it. You no longer have to pay them an access fee and you don't pay their lawyers.

That's how it typically starts out. You pay your own large pay their lawyers. You pay an access fee. So in that tier, about half of the strategies don't work right. We've vetted them, we've looked in like, uh this, this is either a bad risk or it doesn't work at all. Somebody's misguided.

The problem with these strategies that the people who are behind them, like they're selling shoes. You walk in a suit shoe shop, you're going to get shoes or socks or shoe trees. There's really not much to offer, and so they try to jam and down people whether it's a good fit or not, and at that end of the market you want a fit that's precise for you. You want someone to bring to the table what's most impactful and not what they want to sell the most.

So, in terms of the Pyramid of planning, here's kind of what it looks like as you get to that top tier. Although some of them are still not proprietary, they're super Advanced and if you were to go to a top professional, the vast majority of law firms or accounting firms or actuary firms or financial planners. If they could name 10 strategies, I would be shocked again. These are rare, rare.

They take a lot of time to evaluate. Think of each. One will take 30 to 70,000 legal fees to figure it out and evaluate it, which is why it won't be introduced to you, and the vast majority of professional firms are closed architecture, which means you're only going to get their strategies and not all the other strategies from different kinds of firms or investment Banks or trust companies. That makes no sense.

So you want open architecture and full transparency and you want to access those proprietary strategies up at the top, even though they don't happen very often. So I'm going to talk about the advanced tier for S protection and then one proprietary strategy of the roughly dozen that we've invented, and this one is trademark copyright. The stealth prenup has been in Bloomberg, Wall Street Journal, Forbes, Fortune, Barons. It's written up in three or four books on ass protection.

I've never published on it, so, other than people heard me talk, nobody really knows how it works. I've not given away the, the golden juice, and they've never been set aside. So you can do a traditional prenup and I would recommend you do that as well. And then this is the. This is the fallback that can't be undermined, can't be undone and, no matter how incompetent the court of the jury, they can't get these assets.

So it's a big deal. So in route to there, let's talk about the process of ask protection. Pretty straightforward, uh, there's basically four legs on the stool. The first leg are conduct protocols. So some of these large family offices have books of what you can and can't do, like when you turn 16, you don't get to have a passenger when you drive.

You don't get to have your phone on when you drive. You're only allowed to drive within your local talent until you prove to show from six months and not get an accident. You don't get to ride with other passengers and or the high school kids don't get to go to the summer house on the lake with boats and Jet Skis and refrigerator full of beer. What could go wrong?

Right, in fact, Ferris Bueller's Day Off was on as I was walking in here, in terms of what could go wrong, a great example of what you don't want to do, or a level of trust you don't want to give your kids. So conduct Protocols are women. It's basically being responsible right, just like you would in business. You want to be responsible.

You want to be responsible with your family and your personal affairs as well. The second are legal entities that avoid liability. The third are insurances, all the way up to special risk policies and Property and Casualty captives that could protect you. The fourth and final tier, as a start over fund, which is money that's left over that even the U.S government, or any government for that matter, cannot get.

So when you're doing ass protection, biggest plaintiff on Earth is the US government, and when they're after you, you get a real dose of exactly how ass protection works. So the only way to avoid the impact, the U.S government taking anything they want, any time they want, is an international trust in a legitimate jurisdiction that has been funded for a period of time. Probably registration, if that's available, is the is the better move, and I and there are jurisdictions where no trust has ever been set aside. There are billionaire families that we represent.

Every trust they have is international and they're purely tax neutral. Therefore, ask protection and pre-marital planning only. And when you're a multi-billionaire, top 100 family on Earth, you plan to hang on to it. So the first tier on building the stealth prenup is the matrimonial and Family Law Bar tries to reside on these diets, Place their hopes on the prenup or the postnum.

The Dilemma at the prenup or the postnap is they're predicated on complete and full disclosure and you may not want to disclose what you've got to your potential, your fiance or your future spouse. So the only way to get around a prenup or post-nut and full disclosure, and for big families those are almost those, are often audited, compiled financial statements that that conform to Gap and the mistakes in laying out those financial disclosures are solid grounds to set these aside. So a number of years back we went through a five-year period and looked at every single case in the United States and the territories that set aside or modified a prenup or post-nup. So you come up with a list of: here's the positive things that help you support it, here's the negative things that undermine it.

And this stuff goes either way. One Court says it's good, one Court says it's bad. So the goal, of course, is the is the lob up on these positive factors, that military toward enforcement ability. So what we have today considered the global best-in-class long-term wealth management strategy, those are not my words, however, this is a strategy that I devised, is a virtual family office, in most cases running one or more Family holding companies, and in turn, those Family holding companies are 100 owned by trusts.

So the goal for clients is, when they pass away other than a personal residence and tendency by the entirety and maybe a modest car and small checking account, everything is in trust, absolutely everything. Because even a dumb criminal or cyber hacker or gold digger can see if you've got a fifty thousand dollar Persian rug in your living room and a 75,000 Steinway piano. They can figure out. There's some assets.

So having anything go probate just put your family at Great risk. So using trust to avoid that and there's a lot of other benefits as well. So this is what the structure looks like and in my case I built a typical Dynasty trust and ask protection trusts which are Advanced planning. We do domestic gas protection trusts. There's very little case law.

They often don't work and no one ever thought they would stop the US government. They will not. They absolutely will not. And worse, there's a 10-year statute under the bankruptcy law that they slid in December, a number of years back, which means for 10 years any federal judge can stroll into your domestic gas protection trust and take all the assets.

That's a damn long status limitations. The longest and worst on Earth was Bermuda at eight years, but now we've surpassed them, so we are the worst possible jurisdiction for asset protection trusts. So the international trust works very similar. The difference is under the case law of these countries. They can't talk about it. They get fined, lose their banking license.

They might get fined fifty thousand dollars a year. That's more than some of the bankers make. They don't admit U.S lawyers. They repeal the statue of the Statue of a rule against perpetuity, statue of Elizabeth. So you can chart these. Look at about 40 factors and you can rank the jurisdictions for as protection from one to forty.

And, and we've done it, and another firm in La did it, and they're almost identical. We agreed on almost every single point. So you don't want to pick jurisdictions that are kind of good. You know this isn't day. Oh, here's five Alternatives. Here's the pros and cons.

Good luck it's. You want to be here. Here's why you want to be here: because you have the best chance of hanging onto your assets in this particular jurisdiction. So the international trust Nuance is the fact that the end of this truck and it's a one-way door for you and your beneficiaries. Third parties cannot get these assets.

They're fully disclosed, they're fully compliant. U.S government knows you've got. Anybody else can find out. You've come under. That information can be shared globally by most countries. So you're not hiding anything, you're simply putting things there.

That simply cannot be reached in a bankruptcy. You're going under and you think to yourself: why is that such a big deal? Well, out of about 340 single family offices that we've worked with, six are gone. They are come Bank, completely bankrupt, gone small. So these was about 50 million aom plus all their other stuff. The two biggest were 720 million and over a half billion when the company was number one Inc 500.

And watching very, very successful families go through bankruptcy is rather painful because they didn't have a start over fund. So the ash protection trust is a methodology to have something left and we recommend 10 of your net worth. Get it out of. You're out of your business, out of the Investments. You have non-correlated, low-risk assets that you can fall back upon.

So at 10 you're not going to have your lifestyle, but you're going to have a house and a car and you'll be all right. I had a buddy, about 125 million. I flew on his jet, I fly fished down his private Ranch. The Meltdown took him down. How'd you like to be 63 years old and move into your elderly parents basement.

You have no self-respect, you have no Capital to fall back on. It's it's. It's a horrible, depressing situation. You used to want to be there, so this will help make sure you've got something left. So if the stealth prenup says, rather than just rely on the prenup, and I would do that too, I would do belts and braces, the old dick approach, they would ask Mike dickett, why would he wear a belt and bracelet?

He said, well, when you're trying to keep your pants up, you can ever be too damn sure. So same approach: do the pre first if you're, if you can tolerate the disclosure, and then do this as the backup. It's never been set aside. A lot of celebrities, professional athletes, entertainers that you would know are worth hundreds of millions, have used this specific device.

So it's got a managing member which could be your virtual family office or a family office subsidiary, running a family holding company. That would be in one of three USA States or about a dozen International jurisdictions, because of nuances in their laws that facilitate, ask protection. So this is a very precise protocol. In turn, then, the international architecture trust is a one of the one of the two premier jurisdictions where no, no case is ever set aside a trust.

So if you want to make sure you hang on to something without a disclosure obligation, this is the way that you get there. So when I mentioned those 130 proprietary strategies, here is one. We've had a number of others, the drop down partnership, the tax free double swap, the as protection profile are ours. You know two of those.

The passage of time, the tax law changes are no longer relevant, but a number of our strategies are still in that mix and these new strategies come out on a pretty regular basis and you don't eliminate them from your protocol. Some have zero risk and they're just smart moves. Others are riskier and you have to make a cost benefit determination of whether it makes sense for you to do so. But they're very impactful and we tell our Global Network of advisors: whenever you see something new, don't spend your own Diamond evaluated, send it to us and if we've already seen it, we'll tell you so.

For example, when the boss transactions came out, you may recall BDO, semen and Lehman jointly developed it. They came apart, so they had those two versions and there was son of boss, boss three, boss four. There were five versions of the same transaction, which were foreign currency monetary hedging transactions that always had great tax impact and rarely had good economic impact. So we determined we're very quantitative.

Almost all of our lawyers are CPAs, mbas, llms, cfps, we have a sort of one even certified forensic accountants. So we put, put it together, looked at the numbers, uh, and the reality is that playing smart poker isn't going to work and maybe 10 to 15 percent of these people could possibly win. So normally we'll have four or five Tax Court cases a year. At the beginning of 2009, when the economic collapse killed all these projects, we had 34 Tax Court cases and we sent out 5,000 memos Nationwide to affluent families and family business saying: don't do these transactions, we will not write a tax opinion on it, we don't think it's worth it.

We had clients in Silicon Valley and Chicago alone put over a billion dollars into those transactions and the cases went on for a long one was in California, so a California case took four years, IRS took two. So the concept is to pick up these strategies when they're impactful, and this is one that's very impactful in the right kind of circumstances. But the point is, don't limit yourself to the advanced tier and make sure that when you're in the advanced here, use people that are experiencing doing it, because it creates a lot more value to do it at a high level and it will help protect your family because, at the end of the day, we want to live to fight another day. So on that note, I will leave you be.

Thank you very much for having me