Don’t Let Them Get Your Money! How You Can Hide Money from Lawsuits, Creditors, and the IRS

Are you worried that someone might be coming for your money?

Whether it’s a potential lawsuit, or even if it’s the IRS or a creditor, you probably want to protect your assets.

If you want to protect your assets, you need to know where to hide your money, and know how to properly structure certain accounts in order to avoid having someone drain your financial well dry.

Here are some places that you can hide your money:

Retirement Account

One of the best places to hide your money is an ERISA-qualified retirement plan.  Not only can you keep some of your money safe, but you can also earn a tax-advantaged return on the money.  The money in your retirement account is protected from liability lawsuits.  Additionally, your retirement account might have some protection from bankruptcy and creditors (not always, though).

Even the IRS is reluctant to levy against your retirement account.  The IRS does have the ability to access any money that you have access to (so if you can’t withdraw from your account for whatever reason, the IRS can’t require the assets in the account), but in many cases officers are slow to move against your retirement account, even if they could.

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Transfer of Assets

Consider transferring some of your assets.

One place to hide your money is in a business — just make sure that you set everything up properly.  If you keep assets in your business, they can be protected from liability lawsuits, and they even might be protected from different creditors.

Your can also use your business as a shield for other assets.  Guru Robert Kiyosaki did this not too long ago.  One of his many business declared bankruptcy as a result of a lawsuit, but that business only represented a small fraction of his assets.  His personal fortune remained unaffected.

You can transfer ownerships of your assets to someone else, or even transfer ownership to a trust.  That way, you no longer own the assets, and it is harder for others to come after your money.

The Use of Trusts

If you really want to figure out where to hide your money, you can make use of certain types of trusts.

You can use different asset protection trusts to help you protect your money from lawsuits, creditors, and even from the IRS.  However, if you hide your money in a trust, you need to be aware of some of the downsides.


First of all, the kind of trust that is most likely to protect your assets is an irrevocable trust.  Now, you no longer own the assets; the trust does.  The trust can use the money for the benefit of your beneficiaries (including yourself).  However, you lose a measure of control over your money when you put it in a trust like this.  The reason that your money is protected to some degree — aside from the fact that it is no longer technically yours — is that you don’t have ready access to it in many cases.  Even with the IRS, the rule is that you have to be able to access your money.  If you can’t get at it, neither can the IRS.  Of course, the downside to this setup is that you don’t always have the right to access your own money.

Be Careful of How You Proceed

As always, you need to be careful of how you proceed.  Whether you are organizing a business, setting up a trust, or transferring assets in some other way, you should consult a knowledgeable estate planner or attorney.  Make sure you understand the process, as well as the restrictions related to your money.

Also, realize that putting all of your money into these types of accounts as a response to an impending problem is not an acceptable solution.

Creating a trust after the creditors come calling, or after you are served with a lawsuit, can negate the effects of the operation.  You need to be making asset transfers and retirement contributions before someone comes after your assets.  Figuring out where to hide your money is more about long-term planning and asset protection than it is about stop-gap measures when an emergency presents itself.

Have you ever had to hide your money? How did you do it?

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Published or updated July 24, 2013.

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