Wealthy & Wise: Maintaining Privacy in Today’s Business World

About the Video – Wealthy & Wise: Maintaining Privacy in Today’s Business World

Keeping personal and business finances private is essential for several reasons. First and foremost, it helps protect individuals from identity theft, fraud, and senseless lawsuits. If personal financial information falls into the wrong hands, it can be used to commit crimes that can have a devastating impact on one’s credit score, financial stability, and even their reputation. Overall, protecting personal and business financial information is critical to maintaining privacy, financial security, asset protection, and peace of mind.

Prefer to read? A full transcript is provided below.

Cort:

Hello and welcome to another edition of Wealthy and Wise. I’m your host, Cort Christie. Today we’re going to be talking about how you can achieve financial privacy, not to hide things, but lowering your level of exposure and how to gain some level of anonymity in your life for many reasons. And I brought in an expert to talk about financial privacy. I have Adam Kintigh, one of our senior consultants at NCH, and Adam has been helping entrepreneurs, investors for over 15 years now form business structures and set up their lives in a way to allow them a level of financial privacy. Adam, welcome to the program today.

Adam:

Thank you for having me, Cort.

Cort:

So financial privacy, when we talk about that, you know, how do you differentiate from somebody trying to protect maybe their assets versus somebody trying to hide something? Let’s start with that.

Adam:

Yeah. So, the question always becomes, who are you trying to hide from? And that’s the main point in when you’re setting up and operating a business, the general rule. We want to do our best to keep your ownership private. So, you see people posting all the time on Facebook and LinkedIn that they are the owner of the business or managing partner, managing member. And those things can and will be used against you in a court of law. Yeah, I had a, one of my neighbors got involved with a lawsuit. Some employees had some issues with, in California. And next thing you know, the attorney is seeing his $300,000 speedboat and his race car and all the fun toys that he’s posting on social media. And the next thing you know, he’s getting a hammered with a lawsuit. And it’s based on not keeping a low profile. And those are things that we live in a world that we have to maintain some level of privacy, reduce the amount of exposure with. What is your name on record as the owner of?

Cort:

Absolutely. And you know, if there’s a potential to get into a lawsuit, you know, they’re going to do an asset search. It’s like a very basic, fundamental thing. And I know you and I have talked about this before, but that would be any attorney that might be looking at suing you for any reason, your company your investments, or you personally. And if they can find a lot of the things that you might have or if you are wealthy and it’s out there and everybody sees it, and more likely you will become a target. But if they don’t see the toys, the things that you have their vacations you’re on, and you’re less likely a target. And so, I think it’s real important. As you said, you know, on social media sites, are you going to tell everybody everything that you’re doing? And if you do have a boat or you like to fly private planes or you do travel extensively, you know, do you really want that for the entire world to see or do you want to maintain some level of privacy in your life, just in case something was to go on? I want to look like the person that’s absolutely broke. You know, I want to look like the individual that nobody wants to sue or ever go after. I think that’s always a better profile to maintain.

Adam:

Absolutely.

Cort:

So, what kind of things can you educate a person on as far as some techniques to lower their exposure?

Adam:

Yeah. So, the excellent techniques that we have and one of the main things we start with the foundation for everybody, which is doing a revocable living trust. And it’s absolutely mind boggling how many people will form their trust and call it your first and last name, or you or your spouse first and last name. Revocable living trust. There is no law that says we have to have your name in the name of the trust. So, it really is best practice. The revocable living trust is the estate plan. Make sure that when you die, all of your assets get to your children or grandchildren or whoever heirs. We do not have to have your name on that, and we don’t have to call it a revocable living trust. So, I was doing this continuing education with Steve Oceans had a video. He was like the, he had hundreds of millions of dollars. This is the guy that you would want representing you in a court of law.

Cort:

Classic, yes.

Adam:

So, Steve was talking about this was a webinar that he was doing on getting inside your judgment debtor’s mind. And what he specifically talked about is, all right, when that asset search is done, what are they going to find? There’s a very small number of attorneys that truly believe that a revocable trust provides any level of protection. Most attorneys know that the trust you are the trustee and beneficiary while you’re alive. Therefore, there is no protection. But they also learn that there are irrevocable trusts. So, sometimes naming your trust properly can have a huge impact. Even though my trust is not a multi-generational dynasty trust, I call it the Dynasty trust just in case a lawyer was looking at it. What do they think? They think it’s an irrevocable trust that they’re not going to have access to those assets.

Cort:

Interesting. So, you’re talking about how you name a trust just because traditionally, as you mentioned, somebody will say, you know, it’s the Christie family revocable trust. I’ve literally seen that kind of documentation. I know you have as well many attorneys are like, well, let’s just put it out there. Let’s let everyone know exactly whose it is and what kind of trust it is. So, you’re saying come up with an alternate name like the Las Vegas, you know, Dynasty Trust, as you said, just generic. Nobody knows it’s your family’s. And Dynasty kind of represents it as, like you said, irrevocable. That’s how you’re putting it. So, you just put a little bit different spin on it just by titling it. That’s brilliant.

Adam:

Now, that’s our foundation is the trust. And normally we put your primary residence and any of the businesses, your LLCs or corporations are going into this revocable trust. So, there’s my foundation. Now when we’re setting up an LLC, the three ways we can form LLCs, we can list you as manager, member or managing member. Well, the word member means owner. And again, there is no legal requirement that I list members or managing members on record. So, kind of a standard practice. We form an LLC. I’m going to list your name as manager and so long as you understand the law, which is yeah, my name is showing up on public record as the manager of the LLC, but if I’m signing contracts and agreements, I would never sign an agreement as an individual. I’m always acting through the LLC under the protection of the LLC. And by signing as manager, we have statutes that we are indemnified where we cannot be held personally liable acting as officer, director, shareholder agent or employee of the company so long as we’re operating through that business. So, that little piece right there, keep your membership private. It doesn’t go on public record.

Cort:

So, be the manager. Right? The responsible party for maybe operating the company, running the company, but doesn’t tell anyone about your ownership interests. You could be a hired gun. You could be just brought in to run the day to day. Like any big corporation as a CEO, they may have some shares, but they don’t own a majority of the company. They’re just, you know, one of thousands of shareholders. Right? They just happen to have a title within the organization. So, by now, calling yourself a member, you’re strictly the person running it, but not necessarily owning it. So that’s another level. What else can we do? What if we didn’t want our name listed on that LLC?

Adam:

Yeah, so that’s another good point. So, NCH, you have brilliantly come up with a service where your name does not appear on record as a manager. Instead, we have a manager trust, which is just a special trust.

Cort:

A private trust.

Adam:

A special trust whose job it is just to be the manager of your LLC. Now keep in mind that this is a high level in terms of the keeping your name off public record, and at the end of the day they start peeling back the layers. They most likely are going to find you in there somewhere, but it makes it very difficult for someone to do a quick search and figure out what your name is on. So, having a manager trust in place is a great way to provide, again, one last thing that your name is on. You’re not on record as a manager.

Cort:

Well, you bring up a good point because, you know, so that the audience listening today, Adam understands this. Let’s go back to the house. Right? If somebody wants to find out who owns that house on that corner, they go into the county and they can type in on the county recorder’s office, that address of that house and boom. It’s going to pop up exactly who owns it, who’s the owner of that property. So, if you had it in your living trust, as we talked about, under a name that wasn’t your last name, they’re not going to know who the actual owner is. It’s just in trust’s name. In the same way with the LLC is you go into the Secretary of State’s office of any state, and you pull up the name of the LLC that you’re looking at and you can find out who is the person behind that, at least as potentially an owner or as the manager of that LLC. Or in reverse, what if somebody just wanted to find out what Adam Kintigh owns and you were able to pull it up, his name in the state of Nevada, Secretary of State’s office? You’d see, any time Adam may have owned an LLC in the past or currently as well. So, what you’re saying with this trust is, it’s an overlay. It doesn’t provide perfect privacy, but it provides privacy from anybody just trying to dig around, trying to snoop, trying to see what you own and what you have. You know, ultimately, if you get caught up in major legal action, it’s going to get exposed that you have ownership interests. Right? But we’re talking about like state databases, city databases, county databases, places where people could just want to run queries on you and what assets you have and lowering your profile in that public sector where people are just digging around and snooping, frankly.

Adam:

Now that and then the question of who we’re providing this privacy from. And I always remind people, so, people that need to know that you own a business, hard money lender, private money lender, bank, the IRS, of course. So, a bank, know your customer. They have to know who owns this company. So, there are certain places where your name is absolutely going to be showing up. When you file your taxes. Then your name shows up on your tax return. So, the IRS, of course, knows these things. So, it’s maintaining a level of privacy from the prying eyes, possibly the ex-spouse, bad business partners, like I said, just keep an overall lower profile.

Cort:

And of course, attorneys who are digging around maybe to try to figure out who owns that business, who owns that property, you know, maybe you have multiple rental properties, and somebody is looking to go after the owner of that property. Well, let’s just not make it easy for them. You know, you lower your exposure, you lower your likelihood of getting involved in litigation. It’s just simply that easy.

Adam:

I agree. Now and also from a credit standpoint. So, the things that I remind people, are you going to have privacy or are you going to have credit? You can’t have both, because at the end of the day, Dun and Bradstreet is the number one business credit reporting agency. They need to know who you are, where your company is, the physical address. So, to cut down on fraud, they do a lot of research to make sure you are a real business. And oftentimes people, they want the privacy. They don’t want to put their address on record. But then Dun and Bradstreet looks at it and says, nah, you’re not really a real business. You have a virtual address. You don’t have a real phone number that works. You’re using a cell phone. We don’t think a business looks like that. So, being mindful of those things as well, you look at the big picture and the privacy is going to go so far. But when we started getting credit, getting into lending institutions. Then your name’s going to go.

Cort:

So, no way, there’s no perfect way to go about this. If you’re looking for money to pay for a property or to raise capital for a business, you know, you probably want to be front and center. When I’m sitting here talking to all of you as the CEO of NCH, I’m letting the world know that I’m the CEO. But interestingly enough, I am not the owner of NCH. That is in a trust and a generational trust that’s been set up for future generations. So, that won’t correspond. But if I went to a bank and I said I needed a loan for a half million dollars or million or 5 million, whatever it was for the expansion of this business, they’re going to go well, that’s wonderful, Cort. You’re going to sign as a guarantor for the company. And they may then say, and we want you to sign as a guarantor personally as well. And depending on what kind of assets the company has or the credit score of the company, fortunately, NCH can handle that kind of assurance. But in many cases, you have to sign personal guarantees, even if you’ve already put the ownership somewhere else. So, it sometimes is complicated, but I think in this case there are many ways. I want to point out to our audience, Adam, that you can achieve high levels of financial privacy from individuals trying to dig into your life or see who owns something that’s out there. And it’s very achievable. It’s actually quite inexpensive when you consider it, and it doesn’t have to complicate how you run your business in order to achieve some financial privacy. It’s quite simple. At the end of the day.

Adam:

I agree. And while we’re setting up the corporations, while we’re setting up LLCs, putting a little bit of thought into what name is going to go on record, what’s the job title? What address are we going to use for my stuff on there? Or should I hire NCH, use a trust service or mail forwarding service or something just to minimize the amount of exposure you have? It’s always a good thing. And keep in mind also, you’re filling out your company information. If you don’t know how to do it, learn how to fill out a W-9 properly. So many people will put their name, their business name, other, their social security number and company number. They just don’t do it right. And there is information just flowing out into the world, going out to a database somewhere. So, make sure all the paperwork is getting filled out properly. Make sure that you reach out to NCH if you need help with that, so that we can do it right.

Cort:

So, we live in a very public age today and there are ways that you can achieve a level of financial privacy in your life. So, take advantage of some of these ideas that Adam has brought to the table. And better yet, if you’re looking to achieve some financial privacy in your life, talk to Adam. Talk to one of our team members at NCH. We offer a free consultation. We’ll look at your current situation. Adam and others will look at where are you trying to go and how you want to put a structure together for yourself. And these guys are amazing that work on our team here at NCH to help you get to where you’re trying to go. So, Adam, thank you very much for being on the program today. I appreciate it. And everybody listening in today. Thanks for watching another edition of Wealthy and Wise. I hope this information has been valuable to you. Have a great day!

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.