Ask anyone what entity you should use to hold your real estate investments. 100 out of 100 of them will tell you to use an LLC.
Unless one of the people you ask is Dohn Thornton, aka “The Infinite Wealth Strategist” of the consultancy and the podcast of the same name. Thornton will respond to that question by telling you about an entity you have probably never heard of — one that dates back to England in the 1500s.
It’s called a spendthrift trust. On paper, it’s designed to keep your heirs from spending their inheritance too quickly. The beneficiaries have limited access to the assets held in the trust; the trustee essentially holds the purse strings.
But from its inception, the spendthrift trust had a different use — to protect assets from seizure. And that’s really saying something, considering the person its creators were trying to seizure-proof their assets against was King Henry VIII, of the six wives and famously liberal with the headsman’s axe.
That trust, the spendthrift trust, crossed the Atlantic with the British colonists to America. It was first addressed in a US Supreme Court ruling in 1810. Since then, it has evolved to have the characteristics of being totally lawsuit-proof and nearly immune to taxation.
“Anybody can sue anybody,” Thornton said to Ricci Truong of the CamaPlan podcast. “You can’t prevent them from filing a lawsuit. But when it gets in front of a judge and you or your attorneys say, ‘Your Honor, this is a spendthrift trust,’ and literally it’s like getting a get outta jail free card, and the judge will turn to the plaintiff and say, ‘I’m sorry, but you can’t sue this trust.’”
A former foreign service officer in the Soviet Union, Thornton returned to the US and built a successful real estate short-sale business.
Short sales cooled during the price inflation of the COVID pandemic. Thornton used the downtime to research tax-reduction strategies … and that’s how he stumbled upon the Spendthrift Trust.
Now, through the Infinite Wealth Strategist brand, he’s committed to spreading the word about the power of the spendthrift trust to make wealth effectively bulletproof — not only from the IRS, but from anyone who tries to take it.
