EP 410 – All-In-One Legal with Scott Smith

NCS 410 | Legal Solutions

NCS 410 | Legal Solutions

 

In this business, it helps to have your assets secure and protected. Scott Smith, attorney, and owner of Royal Legal Solutions, is your all-in-one legal solution as he helps investors of all types and sizes with asset protection and more. Scott takes us into what he and his firm do, what they offer, and how it benefits you. He discusses some of the biggest mistakes that real estate entrepreneurs and investors are making these days, and shows the things they do at his firm to solve these. Scott also talks about his podcast, Real Estate Nerds, and the biggest surprise he got from interviewing other people.

Listen to the podcast here:

All-In-One Legal with Scott Smith

We’ve got a special guest. We’ve got my buddy, Scott Smith, who’s a local attorney here in Austin, Texas. He was on the show, Episode 261.

That’s a lot. I’m getting old. There’s no way about it.

Scott’s an extremely knowledgeable attorney here in Texas helping a lot of real estate investors. I’ll let you introduce yourself a little bit about what you’re focused on and the firm that you do. You’ve got a growing firm here in Austin.

My name is Scott Royal Smith. I’m the owner of Royal Legal Solutions. I’m an attorney that specializes and focuses on investors of all types and sizes. What we do is we are a niche in high-level asset protection that’s available to the common person no matter where they live inside the United States, as well as anonymizing ownership. With people in the modern age, privacy is much more of a concern. They come to find out. If people can’t find out what you own then they also don’t sue you. It comes to be this synergy that comes in with what we do at Royal Legal Solutions with the asset protection, the anonymity, the estate planning, as well as tax savings with self-directed IRAs, 401(k)s, etc. We’re launching an offshore trust line for people that want to have that ultimate security, which is establishing trust in foreign countries such as the Cook Islands or Nevis. If the worst case hits the fan, your money goes offshore outside of the jurisdiction from the United States of America. No matter what happens, you’re okay.

How’d you get started? You’ve been an attorney for how long? You originally went to law school in New York, if I remember correctly.

I went to law school in New York. During my second year of law school, I bought my first piece of property. It was a transmission auto repair shop. We ran the business and we rehabbed the building while I was in law school and we flipped it. I graduated without any debt. I’m probably the first attorney to ever do that, to make the money during law school to pay for their law school while they’re doing that. I sued insurance companies for a couple of years, which is fun because those guys continually take money from their clients and when they have legitimate claims, they don’t pay. That was my job, to sue those guys. A lot of people tell me, “I got insurance. I’m totally safe. It looks like I’m totally protected.” I was like, “You have no idea. It’s because you haven’t seen it on the news, you have no idea that these guys don’t pay out. They have good legal ways that they’ve crafted the system to not have to pay out.” I sued them for a couple of years and I was like, “I’m going back to real estate investing because it’s a lot more fun.”

When I started going into all these meetups, immediately everybody starts hitting me up like, “What do I do with my LLCs? What do I do with my estate planning? I got fifteen properties or I’ve got one property, what do I need to do with this stuff?” I had one client, his name was Robert Pillar, and he gave me a check for $10,000 at one point and said, “Go figure out all this stuff that I need to do with all these properties. Come back to me. I’m tired. I don’t want to do it.” I took three months to go figure it all out. I read every book that was out there. I contacted all the professionals in the industry to ask them about it, and then came up with the systems I use that’s good for investors that are starting out or people that have 300 homes; that works with that. That’s what I do full time. We have a company that grows at about 20% to 25% quarter over quarter. We’re blowing up on a national scale.

I’m a client of Scott’s services as well, too. He helped set up my series LLC a couple of years ago. We’ve been using it and knocking it out of the park. We’ve got a company, Laughlin Associates, who handles creating books, creating LLCs for people. You’re the attorneys’ others run to afterward to help with asset protection and creating different structures to protect themselves from lawsuits and things like that.

What we look at is saying, “How can you make Scott Carson, for example, judgment-proof?” We’re going to hide all of his assets and we’re going to protect him that if anything happens with one asset, they can’t touch any other assets. If somebody sues Scott Carson personally, they can’t touch him because he’s operating through shell entities that protect him and screen him off from the rest of the world. With the modern tools that are available for investors, they can create these high levels of protection at a fraction of the cost from what was previously available. With a company like Royal Legal Solutions, we in-house all of the work for you. We take care of all the company information, all of the maintenance, all the franchise tax filings, everything. That way, an investor only has to focus on investing or living their life and then we take care of everything else for them. We’re the first company of its kind to do that as a one-stop shop for investors.

You’ve got attorneys that handle this and then you’ve got this attorney to handle this. You’re not a one-man shop though, let’s makes sure that the people will think that you’re the guy trying to do everything. You’ve got other attorneys. You’ve got a growing firm that’s doing major things.

We hit 40 people with the size of the company. About a couple of years ago, it was three people. Now, we’re up to 40. We’re killing it with what it is that we’re doing. We have six attorneys and that number is always growing that are here on staff. We have a ton of highly-trained people all personally trained by me to know exactly how each client file gets handled. The best part about it and what our clients love is that every single client that comes in has a single point of contact with a professional person as their account representative. You don’t want to get bounced around to a bunch of different people. You have one throat to choke if anything goes wrong. You know exactly who to go to talk to about it. Anybody that doesn’t know it, it always comes back up to me for me to be able to answer.

NCS 410 | Legal Solutions

Legal Solutions: With the modern tools that are available for investors, they can create high levels of protection at a fraction of the cost from what was previously available.

 

Most people like to pass the buck versus take the buck. Where do you see some of the biggest mistakes that real estate entrepreneurs or real estate investors are making these days?

There are two main ways that people are missing it. The first is that they don’t have their estate planning in place connected with their asset holding company, which is super important. What happens is that you need a company structure to protect yourself, especially if you own property in your personal name. That’s the worst way to own property. The first thing you need to do is to move everything into an asset holding company. That’s the baseline levels of protection where we like to use series LLCs for a lot of good reasons for that and create anonymity of ownership for that. Tying back into that, you should have your LLC that owns all of your property or your series LLC that owns all your property owned by your living trust as part of your estate plan.

The reason why is because then all of the assets can go in and out of your LLC during your lifetime like we’re going to do because you’re interested in protecting them. You never have to update your living trust again because your living trust owns the company. The company then owns all the assets. Your living trust divides up the company as the one place to take care of everything. That’s different than owning assets individually inside of living trust without a company because you never have updated your living trust. Nobody has. They set these things up and they never touch them again because it sucks having to deal with all the legal paperwork and nobody ever wants to do it. That’s a way that we structure it, which is much easier for everybody to do.

Part of what we do is if we structure that for you, then we also offer unlimited updates for free to it. Anything that you put in place now, you don’t have to have it perfect. It doesn’t matter if it’s perfect. It matters that it’s done. Then it’s checked off your list so you can come back anytime to make modifications to it as you need to, your living trust or asset holding company, whatever the case may be. That’s number one is you’ve got to make sure that your estate plan owns your asset holding company. Your asset holding company owns everything that you have in your life.

The second big piece that I see people messing up is that they’re not maximizing their tax savings benefits with the self-directed IRAs and Solo 401(k)s. The reality is that if you have smart attorneys and smart tax consultants on the line, every single person can exploit these types of tax savings options. There’s no reason not to. It depends on a case by case basis of what exact way you’re going to be able to exploit them. You’ve got to be thinking tax savings. When you’re saving money on taxes, you’re adding about 30% to your return on investment because you have more capital to invest. If you’re using tools like the Solo 401(k), it doesn’t hurt your cash flow because you can borrow money from your Solo 401(k) to use for whatever it is that you need to live your life on. You can borrow up to half of it for that. There are great ways that you can save money on your taxes, create much better investments because of that, and be able to live the lifestyle that you want to you by doing things smarter without having to work any harder.

Are you helping people set up their Solo 401(k)s? Are you administering those? You’re doing it all in the one-stop shop.

We take care of everything here for you. We’re setting up the Solo 401(k)s. We’re helping with the banking relationships that need to get set up with that. If you need to do loans or make investments, we’re able to help with that paperwork. People who have self-directed IRAs, a lot of times they don’t know that they could save a bunch of money on their custodian fees by switching to a custodian-like Kingdom Trust and then using a checkbook control entity with the custodian there to be able to do that. There are other great reasons to use other custodians though because other custodians might be able to provide you with other information about how to invest, or what’s going to be an appropriate investment for you. There are all kinds of ways to decide who’s going to work best for you. There are different people that are going to be more appropriate or less appropriate for you depending on what you want.

We do all of that stuff in-house. Anything that we do, we’re always in-housing it. For some people that we work with, we’re talking with another group that is doing holistic financial planning for people, everything – from what insurance they need to what’s going to make the most of tax planning significant moves that they can make in terms of long-term wealth growth. Anything that we don’t do in-house, we’re going to have relationships with people that we’ve already vetted to be able to say, “Here’s somebody that’s going to be able to help you with that piece of the puzzle that we don’t currently do explicitly.” We know that’s going to integrate exactly with what we do in a way that’s going to be seamless.

It allows you to bring everybody in-house. They’re all speaking the same language. They’re all rowing in the same direction. A lot of people pick different vendors for their insurance, one for their legal stuff, another one for asset protection. They’re going in different directions. They’re never communicating with each other to help you get efficient and fast. That’s how you win if you’re a rowing crew. Everybody’s rowing in the same direction.

How you make things work smoothly is that you need all of these people to be rowing in the same direction. When you start going to a bunch of different people that are different providers that are not already connected to each other, even though they’re all experts and they all might be good, they all have different assumptions built into what’s good. It’s usually around their little nugget of what it is they know and they can optimize their little nugget, but what they don’t know is the full picture. What is different about Royal Legal Solutions and me and why we’re one of a kind company is we’re the first one that understands investors from the ground up because I was an investor. I still am an investor. I’m active in every asset class, real estate – from notes to hard money lending to single-family, multifamily, commercial apartments. My knowledge of what it is that an investor need is built from the ground up, and to me, the whole pie is saying, “You can solve that problem over here, but it is going to call you all these problems down the line.” What we’ve done is saying, “We’re going to have a start to finish solution for people so they have one place they can come to, one person they have to talk to, to be able to get everything done.” Everything is taken care of for them. That way, they can go live their lives the best way that they know how.

We have a question, “I can have an offshore trust. What does that cost me?”

NCS 410 | Legal Solutions

Legal Solutions: How you win as a team is by rowing in the same direction.

 

You’re usually going to spend something around $20,000 to $30,000 to set up an offshore trust. They’re not entirely complicated instruments to be able to set up if once how to do them correctly. It requires a number of relationships with that, which is what we help broker with being able to set that full piece up. It’s the coolest piece. With a high-level asset protection, we do use the series LLCs and anonymity trust. We’re already on a domestic standpoint giving people the absolute best protection and tax advantage type protection you can get. You don’t sacrifice anything with what we do. You’re always going to get the best tax treatment. You’re always going to get the best protection, and it’s going to be anonymous and it’s going to push through a law firm. Everything’s protected by the attorney-client privilege. People can’t even ask about it.

However, even with that protection, hypothetically, somebody that’s aggressive could try to come after you. If you have $1 million plus in net worth, then it makes sense to spend the $30,000 to be able to have something that’s offshore that says, “My doomsday scenario is all my cash goes offshore and it’s protected.” I don’t have to worry about that. Why does that make sense? It takes you so long to make back $1 million. People view risk a lot in the wrong way. We normally view risk as, “Do I feel like I’m a risky person? Is this a risky asset?” Those are two more of the traditional ways that people look at it, but the real risk is how long does it take me to make back the money if this goes wrong? If that’s five years or ten years to make back that $1 million, then the $30,000 that you would spend is risk leveraged against ten years of your life. That’s how long it took you back to work. When you look at risk in this way, then certain actions in your life aren’t risky at all, and other ones become extremely risky to not have the “legal insurance” or other insurance to be able to shift the risk off of you.

It’s not necessarily for everybody having an offshore account.

I don’t think it’s appropriate for everybody, but anybody with substantial net worth should at least be considering it and knowing what is that going to look like for them and does it work to meet their needs. All this stuff is a bunch of paperwork and it’s all headaches. It has to do with timelines and deadlines. Did I get that piece of mail? Did I track that appropriately? How can you live your life in that way with having to keep track of all of these little details that anyone of them could slip through the cracks and be devastating because of that? What we do is we take on all of that for our clients. That way, they can go ahead and live their life.

I was at an event here in Breckenridge with a group of wealthy, successful guys. It was an all men’s group, an inspiring time. It’s a group called GoBundance. A phenomenal collection of people there and they’ve done a good job. I met the guys that had the $5 million plus in net worth and that are proactive about how do I live my best life? They all have done a good job of outsourcing everything possible onto other people that could cause worry to their life, so much so that the only remaining chink they had was what they do about their personal mail. They don’t want their personal mail to go through third-party provider because they’re worried about privacy. I was like, “You guys already have everything done. There’s no business for me to help you with any more.”

They tell me then, I was like, “Maybe we’ll do that, too. What if you could take all of your personal mail and channel it through a law firm? Now that you know it’s all secure and protected from a trusted source, I could scan it all in and send it out to you so you could be traveling the world knowing that all of your affairs are completely private.” That’s the way I’m always thinking. Once you’re a member Royal Legal Solutions or for anybody else that’s reading this, I’m always thinking of ways of saying, “How can I make your particular life better and a solution that’s going to free you up to be able to work on your business, spend time with your family, travel, whatever that’s going to be?” What I get off on is, “What are the hard things that other people haven’t done before that makes your life incredible?”

My mind’s spinning here. I could travel the world and have everything shipped to you. You’re going to shoot me an email, give me a phone call, or shoot me a scanned document if stuff comes in. I don’t have to worry about open ball the damn email and go from there.

There’s a high potential of being able to outsource your entire life onto a law firm underneath those protections and that level of professional service.

Let’s talk about that. Are there some different levels that you’re working with investors, stuff that you’re helping them out with on a monthly basis? You’ve got a couple of packages or something that you work through.

We work on a number of different things. The basic package that we do for people is what we call a simple basic family office. We take care of all of the entity structurings for you and all of the updates to your entities, the maintenance for them, the updates to your state plan, as well as being on call by phone or email and on an unlimited basis to answer any questions you have for you. We charge only $49 a month for that service. It’s a bargain basement thing to say you got access to people that are acquainted with your file and are going to talk to you and not going to charge you $300 an hour to be able to get some basic questions answered.

Above that, we’re trying to figure out what are the appropriate service offerings and price points of saying, “What happens if we allow people to outsource more of their lives to us? Can we handle a lot of their banking for them? Can we do all of the mail services for them?” That way, you’d be completely freed up. We’re talking to people and customers about that to learn more what those pain points are and what is that worth to them to be able to create it? Where does that make sense? It’s a lot of work on our end to be able to coordinate all of that, but if anybody’s interested in exploring that idea, I’m interested in taking it on.

NCS 410 | Legal Solutions

Legal Solutions: The power that we all have individually is the power that we all have collectively.

 

I did not know the $49. That’s a great price offering to help out there, especially somebody you can talk to knock it all out of the park there for you.

Everything else is already totally done. Any updates you need is totally free. It’s a payment that you make every month that you hope you never have to use it, but you don’t have to turn to BiggerPockets. You don’t have to turn to online. You don’t have to turn to anything else. You pick up the phone and be like, “I got a question. What’s the answer?” and you get it immediately.

Scott’s very resourceful. I’ve reached out to you a couple of times for different legal matters. You’re like, “I may not know that one, but you need to talk to my expert friend over here or you talk to this person over there.” I can vouch for it. You’ve also started a podcast, too.

It’s Real Estate Nerds podcast. I love this podcast. One of my favorite things to be doing each week is meeting with these phenomenal investors and hearing about the worst things that ever happened in their life and why it happened. We hit the 2,500 members of Royal Legal Solutions for investors nationally. One thing that I found through my career being an investor and helping out thousands of investors across the United States, the reasons why deals went bad often were never because of something you could see on the front end. If you could see it on the front end, you would have never have gotten into that deal. Something went wrong along the way and it almost has to do always with something’s going on with their mindset or something they weren’t aware of, a blind spot they couldn’t see.

Inside of the Real Estate Nerds, what we’re talking about there is going through the stories where people are revealing the blind spots they had. What did that look like? What did that feel like? What was that like to be able to have powerful relationships with other people? How did that impact what their ability to succeed was? There are a couple of key lessons that we pulled out of that. The biggest lesson we pulled out of it is never go at it alone. You find the people that get burned the most are the ones that try to jump into a pool and they do it all on their own from the beginning. The guys that are most successful in the beginning are almost always willing to give away almost all the pie to other people, professionals, and experts. That way they can absorb all the information, see what it’s all like, and then able to transition to be able to do it on their own. That was a key turning point for me about. That’s neat because what this means is the power that we all have individually is the power that we all have collectively. Our network is our power, and that’s what we need to focus on. Money is a way for people to feel they’re being treated fairly. We divide up the money so everybody feels good about that, and then we go ahead and try to do powerful and incredible things together.

What’s been the biggest surprise from you from interviewing people on the Real Estate Nerds podcast? Anything stands out the most?

The biggest surprise for me is how willing people are to share their pain or the biggest pain points in their life. It’s one of the things that we can find that I use as a barometer to see how full of it is somebody socially. After I get through the first five to ten minutes of the conversation, I’m usually always trying to nose around to be able to see like, “Is this person open enough?” I don’t know if this word will make a lot of sense to people, but it’s vulnerable. Can they make themselves vulnerable, to be honest, and genuine inside of the communication that they have to tell me about something that’s not pleasant that doesn’t make them look good? I almost know that anybody that’s just all about telling me everything that’s great about them is probably not worth my time at all.

The guy that’s willing to be like, “This thing didn’t work out and this is what I learned from it,” or whatever the case may be in that context, is somebody I probably want to do business with and I probably want to have a relationship with because they can be real about it. The most amazing thing was when I was interviewing Rod Khleif, for example, as he was telling me about how he lost all of his money and an insane amount of wealth overnight, and how he bounced back from that. What does that mean to be able to bounce back from that? That’s what it is. The most surprising thing is that the more successful you are, the more vulnerable you are. The more you can tell people about like, “Here’s all the stupid stuff that happened to me. What can I do to be there?” That’s it.

That’s such a good point though because everybody who’s successful has gone through ups and downs. You learn more from the downs than you do from the ups. Those that are truly successful are willing to share those downs so that people don’t make the same mistakes.

What it turns out to be is that you learn so much more from your downs. Also, the downs are the thing that builds your character. You could probably think about your pain points in life as being the things that are almost the most important. When I was out at GoBundance, I was listening to JP Sears and he’s a comedian. You’ve seen him on YouTube as 400 million downloads. He’s an intensely spiritual individual. He was talking to us a lot about that in the small group meeting that we had. One of the things that were interesting that he talked about was about the way that people connect through each other’s pain.

When you want to do a counselor, you’re going to be a counselor for somebody. You’ll track the clients that have the pain point in their life that’s similar to the pain that you have. Once you resolve that in yourself, you’ll stop attracting that client. His proposition was saying, “Maybe the pain in our lives is what brings us together as human beings, and that’s what we’re searching for in other people, people that can understand us through the pain that we mutually share.” I was thinking about that in a context of how do we connect with each other as investors and as people to have these kinds of relationships that are going to last us for the rest of our lives. Maybe that has a lot to do with what’s sexy about people that can be vulnerable and share the things that went wrong because that’s where the real connection gets formed.

NCS 410 | Legal Solutions

Legal Solutions: Your network is your net worth.

 

We all have why what we’re doing. It’s not just, “I want to go make as much money as possible.” We’re all money motivated, but there are things that we overcome. I’ve made my share of mistakes. I’ve had deals that go south, but the relationships I’ve made along the way was how I fixed it, how I solved those issues, how I was to work with people like you and others that helped me overcome obstacles, and make sure that I didn’t make that same mistake again. A lot of people try to do things, stupid things, but that’s the beautiful thing about having a network. Your worth is in the net worth. It’s the relations that you have where you can pick up the phone and call Scott or you can pick up the phone and call others out there to help you overcome those hurdles. The most successful people I know have all bombed at some point and built it back.

Everybody bombs at some point. From an entrepreneur concept, to piggyback off of something you were saying, it’s usually not a lack of trying or even action a lot of times that makes things unsuccessful as an entrepreneur. Most of the time, it’s because you don’t know what the right thing to do is or it’s an option that’s not even on your plate at all because it’s not something you’ve looked into. Read great books. You need to read a pervasive amount of books to be able to have the knowledge, at least a general knowledge of things, to even know who you should be talking to. Past that, it’s definitely the network of people that have done it before. Knowledge is great. It gives you the foundation, but then you need to talk to somebody that’s implemented it at least once or twice. How does the applied knowledge render the results? The facts of your scenario can be different from the facts that are assumed from other types of people giving advice. Only somebody that’s walked through that is going to know.

I would say your network is your net worth mainly because without a network all you’re doing is acting on general knowledge, not specific knowledge of people that have done it before that can tell you, “Your scenario is a little different because of this little small tweak that you haven’t seen before.” This is why you hire attorneys that have been around for at least a few years in the industry. I’m coming on a few years myself for real estate and asset protection. You need the track record of enough looks at it to be able to say, “I recognize what’s going on here and I can see where this case is a little bit different than the other.”

Scott, what’s the best way for people to reach out to you directly or reach out to your firm?

You can call us at 512-757-3994. One of the best ways is to log on to the RoyalLegalSolutions.com website. We have live chat with live operators that are here in my office that I personally train to be able to answer your questions for you. We have eBooks on the top ten things you need to know about asset protection, your Solo 401(k), your estate planning. We have great collections of information from that. Abuse us on the live chat because you can get a lot of your questions answered that you want through the live chat and the articles through the website without ever having to pay us a dime for it. That’s the best way. If you go to the website, that’s going to be your access to the primo information that’s directly from me through my people.

Thanks for being here with us. That’s going to wrap it up for this episode of the show. Check out RoyalLegalSolutions.com online. Scott’s staff is tremendous. They do a great job. Trust me. You won’t be disappointed. His services are awesome. Check out his podcast the Real Estate Nerds out there as well. Go out, take some action. If you’re dealing with issues or struggles, here’s somebody to help you get over that hump and clarify any issues you’re dealing with so that you’ve got a clear point and can make a clear path to overcoming those obstacles so that you can also be seeing us at the top.

 

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About Scott Smith

NCS 410 | Legal SolutionsScott Royal Smith is a real estate investor and asset protection attorney in Austin, TX. He graduated from Albany Law School and began his career in high-stakes corporate litigation. Scott learned the key secret he now uses to defeat lawsuits: that they are a business. Through his defense work, he targets defeating lawsuits before they are even filed by making sure the business part of a lawsuit no longer makes financial sense for a plaintiff to proceed.

 

 

 


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