The Power of Owning Nothing and Controlling Everything
Legal strategies for asset protection and privacy—updated for the 2025 ruleset entrepreneurs can use
There’s a reason the wealthiest families rarely “own” much in their names. They control operating companies, cash flows, and decision rights—but title sits elsewhere: in LLCs, trusts, and occasionally a private trust company. In 2025, that separation is not only still legal, but it’s also gotten easier on privacy in some ways and more exacting on compliance in others.
This is your blueprint.
Key 2025 backdrop
Estate & gift window (2025). $13.99M per person ($27.98M married, with portability). Annual gift: $19,000. The doubled exemption sunsets after 2025 to roughly half. The IRS confirmed no “clawback” on gifts made 2018–2025—use it or lose it.
Quick math: a couple moving $20M into SLATs in 2025 likely shields the full amount; the same transfer in 2026 could expose millions to a 40% estate tax.Privacy & CTA reality. On March 26, 2025, FinCEN’s interim rule removed BOI reporting for U.S. domestic companies (foreign reporting companies still file). State-level anonymity structures (e.g., WY/NM LLCs) matter again—but bank KYC still applies, so expect owner disclosures when opening accounts.
QSBS upgrade (§1202). For stock acquired on/after July 4, 2025, the per-issuer exclusion cap is $15M (up from $10M), with the 10× basis alternative still available. If you’re building a qualifying C-corp, this is real, model-worthy money—and trust “stacking” planning can legally multiply exclusions when done right.
Enforcement: micro-captives (§831(b)). Final regs effective Jan 14, 2025, designate certain arrangements as listed transactions (e.g., loss ratio <30% plus a financing factor) and others as transactions of interest, triggering mandatory disclosures and potential penalties. If your captive is more tax play than risk finance, hit pause and get a second opinion.
The architecture: control without naked ownership
If you want the benefits of control without the fragility of personal title, you need three building blocks that play well together:
Operating and holding LLCs
Use manager-managed, multi-member LLCs where possible and segregate assets (OpCo vs. HoldCo). The charging-order “moat” around LLCs is weaker for single-member LLCs—in bankruptcy, courts have allowed trustees to step into control (see In re Albright, Bankr. D. Colo. 2003). In Florida, the “Olmstead fix” restored charging order exclusivity for multi-member LLCs, but not for single-member LLCs where foreclosure of the membership interest can be ordered. Don’t be a one-member target.Trusts as the real owners
For domestic asset protection trusts (DAPTs), 21 states now have statutes (top-tier: South Dakota, Nevada, Delaware, Alaska, with Wyoming/Tennessee/Ohio close behind), but lookback periods matter: e.g., South Dakota ~2 years (with discovery nuances); Nevada 2 years (with special recordation rules). Fund early, fund clean. Courts have shown they won’t honor attempts to cut off other states’ jurisdiction when facts are bad (e.g., Toni 1 Trust v. Wacker, Alaska 2018). DAPT ≠ time machine.
Alongside DAPTs, SLATs (spousal lifetime access trusts) remain a workhorse to remove assets from your estate before 2026, yet keep indirect access through a spouse. Pair with directed trusts and decanting statutes in top jurisdictions to maintain flexibility.
Private Trust Company (PTC) to centralize control
If your family’s balance sheet warrants it, a Wyoming or South Dakota PTC lets you control trustee decisions without handing the keys to a bank. Both states have clear PTC frameworks (e.g., SDCL 51A-6A; Wyoming Title 13), periodic examination regimes, and pragmatic capital rules (SD often cited ~$200k minimum, subject to regulator uplift). PTC + directed trust = control with insulation.
Where you plant the flag matters (and why)
A few jurisdictional facts that move the needle:
Dynasty duration: South Dakota eliminated the rule against perpetuities (true perpetuity). Wyoming allows 1,000-year trusts. That’s generational leverage when paired with GST exemptions.
Income taxes: Several top trust states don’t tax trust income for nonresidents; situsing a non-grantor trust there can cut state drag (while minding your home-state sourcing rules).
DAPT “seasoning”: South Dakota/Nevada ~2 years; Ohio 18 months. You cannot fund after a liability has attached and expect protection. Timing and documentation matter.
Homestead/TBE overlays: If you live in Florida, your homestead is constitutionally protected (acreage limits apply; dollar amount is unlimited), and tenancy-by-the-entirety (TBE) offers strong two-to-one creditor protection for married couples. Real title decisions are state-specific.
2025 reality check: case law that keeps planners honest
Single-member LLCs leak. In Albright, a bankruptcy trustee took control of a single-member LLC—charging orders protect co-owners, not you from yourself. In Florida’s Olmstead line and the 2011 legislative patch, multi-member LLC interests got charging-order exclusivity, but single-member interests remain foreclosable in the right circumstances. Add a second real member (or a properly capitalized manager entity), and keep formalities tight.
DAPT statutes don’t nullify other states. Toni 1 Trust v. Wacker (Alaska 2018) held that Alaska couldn’t monopolize jurisdiction over fraudulent transfer claims to an Alaska trust—another state’s court can act. Translation: fund early, document solvency, avoid badges of fraud.
Tax levers tied to structure (and how the 2025 changes amplify them)
QSBS is back in neon letters. If your startup is a C-corp that meets §1202, every “taxpayer” gets a cap—now $15M per issuer for stock acquired after July 4, 2025, or 10× basis, whichever is greater. Families have long “stacked” exclusions by gifting to non-grantor trusts (each trust = its taxpayer) or adult family members—complex, but very real when done correctly. Work from formation: verify gross assets ≤ $50M at issuance, qualify the active trade/business (no services/finance/hospitality, etc.), and hold 5 years (OBBBA added tiered exclusions for earlier exits in some summaries; the 100% at 5+ years remains the gold standard).
Estate & gift clock. With a $13.99M 2025 exemption and no clawback, front-load gifts to SLATs/IDGTs in 2025. In 2026, expect a hard reversion. If you intend to use a dynasty trust with GST exemption, allocations are stickier when done now. (IRS)
Captives: proceed like an adult. If you genuinely have uninsurable enterprise risks, a captive may still fit—but in 2025, loss-ratio and financing tests can make yours reportable or listed, with material advisor penalties in play. If someone is selling you “guaranteed tax savings” from a micro-captive, walk. (Federal Register)
Audit environment. The IRS closed ~505,000 examinations in FY2024 and recommended ~$29 billion in additional tax. Funding from the 2022 IRA and targeted initiatives is raising coverage in select categories (high-income individuals, partnerships, promoters). You can assume scrutiny when you push edge strategies. (IRS)
Privacy & CTA (again). With domestic BOI reporting removed for now, state-level anonymity and careful use of nominees/registered agents matter again—but don’t confuse privacy with secrecy. Bank KYC and tax reporting remain; structure for resilience, not invisibility. (FinCEN.gov)
Two real-world builds
Case A — SaaS founder targeting a $100M exit (QSBS + trusts)
Entity & QSBS: Delaware C-corp; validate §1202 from day one (gross assets ≤ $50M at issuance, qualified trade/business, 5-year hold).
Cap table planning: Founder allocates shares to one SLAT (SD directed trust), two non-grantor dynasty trusts (WY, 1,000-year term), and a personal bucket.
Numbers: On a $100M gain (2029), post-7/4/2025 issuances can exclude up to $15M per taxpayer (or 10× basis). Trust “stacking” lets each non-grantor trust claim its own cap.
State conformity: Model federal vs. state—CA/PA don’t fully conform; exiting residents may face state tax even with federal §1202.
Paper trail: Maintain stock issuance logs, basis, 5-year clocks, and board minutes referencing §1202 qualification at each round.
Case B — Service roll-up (risk walls > rate games)
HoldCo/OpCo split: WY HoldCo owns IP/brand; regional OpCos (manager-managed, multi-member LLCs) license the IP; separate banking and written OAs.
Cash flow & situsing: Excess cash sweeps to HoldCo, then distributes to a South Dakota non-grantor trust for state-tax efficiency (mind sourcing rules).
Control layer: Establish a WY Private Trust Company (PTC) as trustee; use directed trusts with investment/distribution committees to keep control without title.
Risk transfer: Prioritize umbrella + contract indemnities; if considering a §831(b) captive, test against 2025 listed/TOI thresholds before engaging.
Governance: Quarterly minutes, management agreements, and service-level contracts between entities; annual solvency memos to support transfers.
One page you’ll keep: 2025 jurisdiction cheat sheet
Sources: dynasty & RAP (SD/WY), DAPT periods (SD/NV/Ohio for comparison), PTC statutes (SD/WY). Always verify specifics against your facts. (South Dakota Legislature, law.justia.com, nvbar.org, dlr.sd.gov)
The privacy perimeter (beyond entities)
Real property: In Florida, a properly established homestead is constitutionally protected (acreage limits apply; dollar value unlimited), and TBE can shield jointly held assets from a one-spouse creditor. Title choices (LLC vs. TBE vs. trust) have different creditor and estate outcomes; do not just default. (Alper Law)
Data leakage: The cost of a U.S. data breach remains brutal—IBM’s 2025 report puts the average U.S. breach above eight figures; threat actors go after closely-helds precisely because governance and cyber budgets lag. Treat OPSEC (registered agents, mail drops, strict privacy hygiene) as part of your asset protection. (Florida Legislature)
CTA status: With domestic BOI reporting off the table (for now), getting filings right at the state level and maintaining bank/KYC packages is back to being the center of gravity for privacy. Don’t confuse less reporting with less liability. (FinCEN.gov)
The mistakes that blow up good plans
Funding late. Courts don’t save last-minute transfers. Toni 1 Trust made that clear—other states can reach assets when facts scream fraud. Season your structures.
Single-member complacency. Albright says your solo LLC is not the vault you think it is. Add a faithful second member and run it like a business.
Cute captives. The 2025 regs mean paper-thin risk pools are a paper trail to penalties. If your loss ratio and financing profile fit the listed/TOI tests, disclose—or rethink.
A 30-day sprint to “control, not title”
Week 1: Inventory everything you own personally. If a plaintiff’s lawyer pulled your county recorder and UCC filings tomorrow, what shows up under your name? Fix that.
Week 2: Establish a clean HoldCo/OpCo split (multi-member, manager-managed), open separate bank accounts, and document the structure.
Week 3: Draft a directed dynasty trust (SD/WY) and, if appropriate, an SLAT. Move passive assets first (marketable securities, IP).
Week 4: For startups, paper QSBS now—and if you already have QSBS, model post-7/4/2025 vs. pre-7/4/2025 lots and consider trust “stacking” within substance and state rules. For risk transfer, review any captive against the 2025 final regs.
Own nothing important. Control everything important. In 2025, that means entities hold title, trusts hold entities, you (or your PTC) have the power to direct—and your tax plan works with, not against, that architecture. The numbers are too big to ignore: $13.99M per-person transfer window this year with no clawback, QSBS caps that can shield eight figures, and privacy rules that reward getting the state formation right again. Do it early, do it clean, and your future litigators will be very bored.
This is for educational purposes—not legal or tax advice. Work with counsel who lives in this stuff, not around it.