Entity Layering – Three Levels That Can Help You Grow Your Business

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Entity Layering – Three Levels That Can Help You Grow Your Business

By: Don Burnham

Entity layering is a key concept in risk management. It is like the layers of an onion. The outside of the onion is the toughest layer and there are many layers to the onion. As soon as you peel that first layer back, a chemical reaction begins, because the onion is defending itself and in each layer, the reaction gets a little stronger.

This is a good analogy for asset protection. You want to have layers of protection. Each layer makes it more difficult to penetrate. If you put the right techniques in place, in the proper sequence, you will make it very difficult for a plaintiff to get to your assets.

That means realigning the ownership of how you hold title to reduce your risk. You want to have assets held so that you have some layering between you and the plaintiff.

By realigning the ownership of your assets to reduce your risk and further protect yourself for potential problems, you will to have a much lower stress level and be able to enjoy your wealth as you accumulate it.

Level one is having the right kind of trust. It might be a Living Trust, a Wealth Preservation Trust, the Multi- Generation Dynasty Trust, or a combination.

Limited Partnerships

Level two is the management and control layer. It may be a Limited Partnership or a Limited Liability Limited Partnership. At present, the LLLP has only been adopted in about seven states. But it can be established in any of those seven states and then imported to where you live and it can own your corporation and/or your Limited Liability Company.

Asset Protection

Level three is the operations layer consisting of your corporations and LLCs that are owned by the LLLP. These techniques put layers between a potential plaintiff and you. You want that plaintiff to be two or three layers out, so that when they start trying to peel that onion, they can't go directly to your bank account. You want them to be forced to go through the layers and you want it to cost them a lot of money.

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About The Author
Don Burnham is an entrepreneur, author, real estate investor, teacher and speaker. He is CEO of the International Association of Seminar Professionals (IASP) and CEO and co-founder of the Wealth Restoration Institute, LLC, at www.weknowthewayback.com

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