Q: Why Hasn’t My Attorney Or CPA Told Me More About These Asset Protection Tools?
A. We live in a very specialized world. For example, doctors specialize in a specific area of medicine (orthopedics, ophthalmology, radiology, cardiology, etc.). It is no different in the legal world. There are specialists for every part of our legal lives. There are attorneys who specialize in patents, family law, bankruptcy, personal injury, prosecuting, taxes, estate planning, etc. Asset protection is a highly specialized area of law, which most attorneys are unfamiliar with. A survey by the American Bar Association showed that less than one percent of attorneys claimed asset protection as their specialty. Our legal team has over 100 years of combined experience in the field of asset protection with clients in all 50 states. Their stategies have been used for years by national hotel chains, professional sports teams, doctors, dentists, savvy business owners, and associations.
Q: Aren’t All Limited Liability Companies (LLC) And Family Limited Partnerships (FLP) The Same?
A. Absolutely not. It is very important to know that there is a difference between the language in a standard LLC and FLP and the language in an LLC or FLP drafted for lawsuit protection. Most LLCs and FLPs do not contain language surrounding the manner in which general partners can distribute income. Most contain language that would force the FLP or LLC to distribute income to a creditor. You may have an LLC or FLP and think you are protected by the charging order; but if your legal document does not contain unique clauses regarding the distribution of income, you will still have to distribute income to satisfy the judgment. Our asset protection FLPs and LLCs guard against this possibility with over 50 unique clauses not found in most FLPs and LLCs. These clauses have been drafted, perfected, and proven in all 50 states. In our legal documents the general partners may legally withhold their income distributions from plaintiffs or whomever else they please because of the clauses in the legal documents.
Q: Can’t My Local Attorney Set Up The Entities (FLP, LLC, Living Trust, Etc.) For Me?
A. Most attorneys can set up an FLP, LLC or Living Trust, but not all entities are created equal. The effectiveness of an LLC and FLP depends on the language used in the document. Our team of legal experts has reviewed thousands of LLCs and FLPs and has found that over ninety percent of the time the LLC and FLP the client received from their local attorney did not contain the needed language to protect assets in the event of a judgment. Be aware that if you go to your local attorney to have him set up a LLC and/or FLP for you, the odds of it containing the language you need to really be protected is less than ten percent. Our documents have been drafted and perfected over the last 30 years by the nation’s top attorneys for complete asset protection and tax reduction. If your local attorney has previously done work for you, it is always good to get a second opinion to make sure your assets are structured in the best possible way and that the documents contain the language needed to protect you. The blueprint and consultation you receive from our legal team will allow you to review your current asset structure, explore changes to existing entities, consider adding new entities and help evaluate the benefits recommended by the legal team of experts.
Q: Do I Need An FLP If I’m A New Business Owner?
A. YES! It is important to structure your asset correctly from the beginning to protect assets as you accumulate them. Having your FLP in place will give you the peace of mind that comes from knowing that you will never lose any of your assets.
Q: My Attorney Tells Me I Already Have Everything I Need. Is That True?
A. It is always a good practice to get multiple opinions to be sure you are structured as correctly and safely as possible. One of our clients, a urologist, relied on the advise of his local law firm and accountant for years until we suggested he meet with our legal team. Reluctantly, he did; and he quickly learned that the strategies his attorney and accountant had recommended had put him at great risk to lose most of his assets in the event of a lawsuit. For instance, his attorney had recommended putting his assets in his spouse’s name without taking into consideration that his spouse was the bookkeeper for his business, which made her vulerable for a lawsuit because she was an implied officer of his corporation. Putting assets into a spouse’s name is one of many common mistakes made by many attorneys. There is a much better way to protect assets. Our legal team of attorneys also discovered that this doctor had been paying more in taxes than he needed to for years. By structuring his assets differently, they were able to reduce his tax bill by $20,000 annually. The urologist was extremely satisfied with the services of our legal team. His only regret was that he had not worked with an asset protection and tax attorney sooner. Avoid the mistakes many professionals and business owners are making today by getting a second professional opinion from our legal team of experts.
Q: Will The Use Of These Strategies Increase My Chances Of Being Audited?
A. No. In fact, IRS statistics show that a sole proprietor is much more likely to be audited than a corporation, so using the strategies discussed in our presentation will actually reduce your odds of getting audited. If on the rare occasion you are audited, it is nothing to worry about if you follow the IRS codes and have proper documentation. For example, one of our clients pays 10% of his income as tithing to his church, which he takes as a charitable donation deduction on his tax return. His 10% donation is much higher than the national average so one year he was audited. It was a very simple process. He provided the auditor with the IRS approved documentation for the tithing deduction, and the audit was quick and painless.
Q: Has The Family Limited Partnership Held Up In Court And Been Proven To Protect Assets?
A. Absolutely! A carefully-constructed Family Limited Partnership has been proven to protect assets in court case after court case. Thousands of professionals have structured their assets for lawsuit protection, and many of them have been sued. However, none of our clients, who have had a properly-drafted Family Limited Partnership, have lost a single cent as a result of a lawsuit. Many years ago, one of our attorneys appeared in a federal court to defend a client who had used our asset protection principles. The client had strategically placed his personal belongings in a carefully-worded Family Limited Partnership that protected him from losing anything in a lawsuit. The Federal Judge said to our attorney, “Counselor, tell me why I should not send your client to jail for failure to turn over his assets and pay the judgment rendered against him by this court?” The attorney responded to the Judge by explaining the details of the Family Limited Partnership to him. He also explained the tax ramifications to the plaintiff that if he utilized the “charging order” he, himself, would be responsible for paying his client’s taxes on his assets. Not only did the judge not throw our client in jail, but the judge actually started taking notes on how the client protected himself from this lawsuit. After the case was adjourned, the judge asked our attorney to explain Family Limited Partnerships to him in detail for his own use. Not only was the plaintiff unable to collect the money for the judgment, but the plaintiff’s attorney had just lost tens of thousands of dollars in this contigency court case. Both the plaintiff and his attorney were devastated with the results. In addition, if the plaintiff had attempted to use the charging order, all he would have received was a tax bill from the IRS. Attorneys who have been burned in the past with similar results agree that if a properly-drafted Family Limited Partnership is discovered during pre-trial investigations, they will not pursue the lawsuit.
Q: Will The Family Limited Partnership Work In My State?
A. YES! The Family Limited Partnership is legally established in all 50 states and can be used in every state to protect assets. To date, our legal team has helped thousands structure their personal and professional assets into Family Limited Partnerships.