Financial and Family Privacy – Episode 444

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[00:02] Welcome to the Presperity Podcast. Today we’re going to be talking about privacy. And this is creating privacy for you and your money and your family. This is a subject that not too often is covered, but in our day and age I feel is even more and more important. So let’s dive off of that first, Kim. Is this something that when you talk with clients that they feel like they are looking for that privacy? Or is it maybe something that they don’t verbally express, but once it’s talked about they realize they need? I think they are. It usually comes up under the term asset protection. And so we tend to think of wanting our assets to be private. But I believe that you’ve got some information that’s going to help us up level that definition of privacy.

[00:48] But let’s just have a real quick runaround of asset protection and private assets and acknowledge that there are some places like life insurance in certain states, certainly like Bitcoin, that do enable you to keep assets private. And then there’s of course corporation structures like LLCs and even C-corps and S-corps to a certain degree. There’s family limited partnerships. And while I’m certainly not an attorney, I do have some experience not only in creating some of those structures for myself, but also operating within them for many years. And we can absolutely refer people to an attorney in their specific state to help them get some of those asset protection layers. But let’s dig in and take this privacy discussion

[01:40] to another notch. Okay, that’s great. And let’s start with the very top piece, which would be why would someone want to do this? Because if you’re not doing anything bad, why should you not hide everything or whatever the typical rebuttal would be and I think I know the answer to it. I’m happy to hear your answer to that as well. Well, it’s funny. I have two answers. And the first is desire for humility. Like, I don’t want pictures of my house blasted all over and okay, on Google Earth, you can get them, but that’s fine. It takes a little bit of work. I certainly don’t want cash flow numbers or net worth numbers blasted all over. Interestingly enough, though, some people do, right? You have a lot of network marketer people,

[02:27] a lot of want to propose a certain business structure and they absolutely on the computer screen show what they earned from this particular strategy or not. So that’s, I think, just a decision that you and your family have to make. And I can’t wait till we can get into the family part of the discussion. I have a funny story about it. But then I think there is another whole element and that’s just being wise from a litigious society environment that we do live in. We actually just had a blog post on that last week. So that was, I’m thinking the first or second week of December, if you want to maybe even grab that for the show notes on the privacy of assets and how important it can be to have them be protected

[03:18] in the event that you either, for example, get in a car accident or in the event that somebody decides, even if incorrectly, that you’ve done something wrong and they want to come after you, then you want to be within privacy environments. So that job is harder for them. I see that people, as you mentioned, could be a network marketer or someone that’s just overexcited, we’ll say. Sharing their numbers and information typically is someone that’s earlier on in a career or earlier on in success. And then the people that have had the battle wounds and the experience typically want to keep things closer to their chest. And it’s not because there’s any nefarious activities. It’s that as you expose those things out there,

[04:08] it just creates more problems of sucking your time away. So let’s go into pieces of this asset protection. And there are items that I do want to share. This is something that we’ve been diving into quite a bit. So you mentioned the structures of having your life insurance set up correctly. So let’s talk about that, and then we’ll talk about corporations and accounts and other pieces. Absolutely. So the life insurance, the set up correctly part, I think just happens naturally. The laws are what they are. You don’t have to really do anything too special. However, they do vary quite a bit by state. So as an example, Texas, Arizona, Florida, life insurance cash values protected 100% for residents of those states.

[04:58] And all you have to do is live there. It doesn’t matter where you bought the policy. It matters where your residence is. Other states have different percentages that they have in terms of the cash value being protected. So that’s just a really valuable thing to know. And you live where you live, it’s something to be conscious of and possibly make a change. There are certain trusts that you could put the life insurance in that would add another layer of protection. One of the challenges with this space, though, is by doing that, it sometimes protects it from you as well, which may not be beneficial when you’re in your younger years. To be specific, there’s an irrevocable life insurance trust that would absolutely pull the ownership out of your

[05:42] hands irrevocably. So you don’t want to be doing that until you’re in your probably 80s, I would say, maybe 70s. So as all things, this one’s going to take a little bit of digging in and figuring out as you progress to really dial in and do what’s best for your situation and your family. And you mentioned corporations. So there are things that you can do, different entities you can set up at LLC and S Corp, C Corp, whatever that may be. And then having additional layers, a registered agent that may be with a service versus your public information out there. What other pieces are you looking at? Well, just the idea of LLC is limited liability. So to a certain degree, that’s a layer of privacy

[06:29] in a way because it limits liability. There are even further things that you can do, again, state-based, where, for example, C Corporation might have a agent that is the public owner of record. And so that’s, I think, a little bit more what you were talking about in terms of protecting even your name from being out there. And I have mixed feelings about that. There’s certainly people that say privacy is dead. And with the Internet, maybe it is. So you have to look at it and really decide what’s important to you. Yeah, absolutely. Absolutely. Now, other parts of privacy going into actual are personal accounts. You can do things such as having your credit monitored. You can go and freeze accounts.

[07:15] You can look at the information that’s on there and make sure that it’s updated and is correct. If a person has a common name, there could be some problems there. Now, we talked about privacy as a family. That’s a really interesting part of the conversation. That requires the family to get together and to talk about money. So what does that conversation look like when you help people? Well, this is the one that I have a funny story at. So a family of ours knew that they wanted to start to share finances with their teenage children. And then it got back to them that the teenage child, innocently, was sharing the parents’ income with their friends. Some people might not be bothered by that. But this particular family was a little surprised.

[08:00] Then they had to have a discussion about the family discussion that stays at the table as opposed to the other types of discussions that can be shared. So you do want to maybe have that discussion first. But then I’m a huge fan of having money conversations as early and as often as possible to get everybody on the same page in terms of what’s actually going on. Yes, absolutely, having those types of conversations. As we talked about a few minutes ago of be it network marketers or bloggers or others talking about their finances, there is a downside to that. And this has actually popped up recently. So with the rise in cryptocurrencies and the ability to transfer large sums of money on a mobile device, that’s where this has popped up.

[08:50] And there are groups of people that have targeted bloggers that share their income. And now they’re extorting that from them. And unfortunately, in some of those situations, it’s permanent. You’re not going to get that money back. It’s not like when someone creates a fraud claim with a bank account and then you go through a ton of paperwork and you get money back. It doesn’t happen in the cryptocurrency world. I think we live right now in this tail end of 2021. What’s coming up in the future I think is very important for us to be using as much privacy as possible. Bragging is never helpful. And that actually ties in perfectly with the final question because bragging isn’t actually a form of prosperity

[09:36] because once you start really bragging, you’re just looking at what you did and it’s all about you, me, me. And the value kind of just sucks dry. So how do we look at privacy from the prosperity perspective, Kim? It is absolutely something that each person gets to make their own individual choice on and with their family. And so it will bring up good discussions or maybe differing opinions, which is great. That’s part of what makes a good discussion. And then you as a family can decide what’s important to share, what’s important not to share. And this can then play itself out in all areas because not only do you have income things, but there’s a lot of aspects of personal life that your family needs to make a decision on.

[10:28] I’m not going to say whether it should be shared or not. It’s up to you. And that’s the beauty of where we are living today is you and your family get to make that choice, but make it a conscious. Well, thanks for sharing that, Kim. And we will put information to the blog post that you referenced inside of the show notes for all of your readers that want to refer to that. That way you can dive in a little bit deeper. And then if you do have specific questions, send those to Kim at helloatprosperitythinkers.com. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.