Private Trust Plays: Protecting & Leveraging Wealth

What Is a Private Unincorporated Association Trust?

A Private Unincorporated Association (PUA) Trust is a legal entity formed under common law and contract principles — not under state corporation statutes. This makes it fundamentally different from an LLC or corporation and grants it a unique set of protections and capabilities.

PUA Trusts are used by sophisticated investors and business owners to:

• ✦Hold assets away from personal liability
• ✦Create a holding company structure without public registry exposure
• ✦Separate the "ownership layer" from the "operating layer"
• ✦Access certain funding programs that recognize trust entities

The Two-Entity Structure

The most effective setup pairs a PUA Trust (holding company) with a State Operating Company (LLC or Corp):

PUA Trust (Beneficiary/Owner Layer)
         ↓
State LLC/Corp (Operating Layer)
         ↓
Business Activity

The Trust owns the LLC. The LLC conducts business. Judgments against the LLC cannot pierce to the Trust without extraordinary legal effort.

Why Wyoming, Nevada, and Delaware?

Wyoming — The gold standard for privacy and asset protection. Wyoming LLCs have no requirement to list member names in public filings. Wyoming also recognizes Statutory Trusts with robust protections.

Nevada — Strong charging order protection. A creditor who wins a judgment against an LLC member cannot seize the LLC's assets — they can only receive a "charging order" on distributions. Nevada also has no state corporate income tax.

Delaware — Preferred for investment structures, venture capital raises, and companies seeking institutional funding. Delaware's Court of Chancery is the most sophisticated business court in the US.

The Holding Structure Play

Step 1: Form a Wyoming PUA Trust or Wyoming LLC as the holding entity. This becomes your "clean" entity with no business activity — it simply holds assets.

Step 2: Form your home-state operating LLC under the holding entity. This is where you conduct business, sign contracts, and take on liability.

Step 3: Open bank accounts for both entities separately. Build business credit under the operating entity.

Step 4: Transfer profits from operating entity to holding entity via management fees or distributions. Assets accumulate in the protected holding layer.

Trust Plays for Funding

Banks and lenders see a holding company structure as a sign of sophistication. Key benefits:

• ✦Separate credit profiles — your operating LLC and holding trust have distinct EINs and credit files
• ✦Manufactured spending capacity — the structure allows for inter-entity funding arrangements (like the Penny Loan Program) with clear paper trails
• ✦Multiple funding channels — each entity can apply for credit independently
• ✦Real estate acquisition — the trust can hold property title, removing it from personal estate

Common Mistakes to Avoid

1. Commingling funds — Never mix personal and business money

2. No operating agreement — Every entity needs documented governance

3. Dormant business accounts — Empty accounts with no activity hurt fundability

4. Single-entity structure — One LLC with everything in it is maximum exposure

5. SSN instead of EIN — Never use your Social Security Number for business accounts

Implementation Timeline