What Your CPA & Attorney Don t Know Can Leave You Hanging!

Transcription

1 What Your CPA & Attorney Don t Know Can Leave You Hanging! Speaker: Sponsored by: Dan McNeff

2 United States: Lawsuits 5% World Population 94% of all Lawsuits Worldwide

3 A Lawsuit is Born Cause You Cannot Control Motivation You Can and Must Control

4 Asset Definitions High Risk Asset: Can Create a Lawsuit Safe Asset: Cannot Create a Lawsuit Inside Asset: Everything owned in One Entity Outside Asset: Owned by Individual or by Separate Entities

5 What About an L.L.C. C-CORP L.L.C. SUB S SOLE PROP PARTNERSHIP Will Protect Assets Inside of The Entity From an Outside Lawsuit

6 The Beginning of Lawsuit Protection *** Properly Drafted *** Family Limited Partnership

7 Liability? GP: Total 1% General Partner LP: None Limited Partners 99%

8 Types of Assets Business Purpose? Any Legal Purpose Asset Home Real Estate $ $ Personal Property Income $100,000 1) Family Limited Partnership General Partner(s) CONTROL 2) s-corp - 1% Limited Partners Own / Not Control H /2% W -49 1/2% children, grandchildren, elderly parents 100%

9 Trial Attorney s Answer:

10 Passed in each individual state Would not allow ownership transfer from defendant to plaintiff The Charging Order Gave a judge the right to force a distribution and order the defendants share of the income to the plaintiff

11 The Charging Order Asset protection attorneys changed the wording so that only the general partner could order a distribution Also gave the general partner the option to take income for management or to loan money from the FLP

12 The Charging Order IRS Ruling States: A plaintiff using the charging order will have to pay income taxes on any monetary judgment even if there is no distribution from the defendant.

13 The Charging Order WARNING!!! Nearly all limited liability companies created in America today use the wording that allows a judge to order a distribution

14 The Limited Liability Company or LLC Modeled after the Family Limited Partnership but is less complicated and intended for business purposes.

15 The Remedy for Getting ASSETS Out of an L.L.C. is: The Charging Order

16 The Charging Order WARNING!!! Nearly all limited liability companies created in America today use the wording that allows a judge to order a distribution

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19 Typical Structures S, C (or P) Corporation / LLC Owns: Building Equipment Practice/Business (goodwill) Joint / Individual Ownership / Sole Proprietor: Personal Property Home $$$ Rental Property Vacation Home Closely Held Corporation Officer of the Corporation What does this structure protect?

20 Asset Protection Structure Living Trust Business Practice/ Business Owns: Goodwill LLC Owns: Equipment LLC Owns: Building LLC Owns: Rental Property LLC Owns: Home LLC Owns: Vacation Home FLP Holds all safe assets $$$ Rock Solid Asset Protection

21 1. Place all assets of significant value in asset protection entities and all high risk assets in separate entities. 2. Make sure that all entities are written on a Non Pro-Rata basis and that they give the sole distribution authority to the general or managing partner.

22 Prior to 1960 Highest Individual Tax Rate was 90% From 1960 to 1982 Highest Tax Rate was 70% Since 1982 Highest Tax Rates dropped to 40% or less Why did revenue increase after 1982? Tax Shelters and Credits were almost all eliminated with some exceptions such as home loan interest deductions.

23 Administrative Entities 1. C/P Corporation Tax Advantage with Corporate Resolution 2. S Corporation Helps Reduce FICA 3. Sole Proprietor Easiest to use 4. Partnership

24 IRS Section 280a Rent Home To Business The IRS allows you to charge rent that is equal to a Hotel in your area decorated similarly to your home, times the square footage of your home. 280a provides for rental of $1,500 per day x 14 days per year = $21, ,000 - $21,000 = $179,000 Where did the $21,000 go? You personally 280a says it is not taxable income

25 $200,000 X 35% $70,000 $179,000 X 35% $62,650 $7,350 Actual Cash Saved

26 Types of Assets Business Purpose? Any Legal Purpose Asset Home Real Estate $ $ Personal Property Income $100,000 1) Family Limited Partnership General Partner(s) CONTROL 2) s-corp - 1% Limited Partners Own / Not Control H /2% W -49 1/2% children, grandchildren, elderly parents 100%

27 Does NOT Protect Your Assets Living Trust Does Protect Against Probate

28 Probate Problems Time Consuming Expensive No Privacy

29 Two Ways to Avoid Probate 1. Don t Die 2. Living Trust

30 How to implement these Tools and Strategies?

31 Concerns for Consideration 1. Most Attorneys know very little about lawsuit prevention.

32 The BIG Problem #1 There are very few Asset Protection Attorneys The American Bar Association reports that LESS than.05% of Attorneys in the U.S. specialize in Asset Protection.

33 Concerns for Consideration 1. Most Attorneys know very little about lawsuit prevention. 2. The entities they use are not designed for asset protection

34 Concerns for Consideration 1. Most Attorneys know very little about lawsuit prevention. 2. The entities they use are not designed for asset protection 3. The Cost of entity structuring can be outrageous.

35 The Solution

36 Legally Mine has been around for over 40 years, and educated hundreds of thousands of professionals Legally Mine is affiliated with: Bank of America Harding Financial Services ABA Accounting Legally Mine has over 20,000 happy clients Legally Mine has an A rating from the BBB

37 PREMIUM+ Program Cost of $100/mo. (12 months) DOCUMENT REVIEW & ASSESMENT CREATING BLUEPRINT documents & file the amendment(s) with your state. DEVELOP A TAX-REDUCTION PLAN Most existing documents are NOT asset protective. We can/will amend these Our team of paralegals will set appointments to get you started. After a STEP ONE: questionnaire, your Blueprint will be created by one of our Asset Protection Attorneys Most accountants do tax returns NOT Tax Reduction Plans. We make sure that the entities you use have a tax reduction purpose. Within 10 days you will have PREMIUM+ a Blueprint Review with an attorney or senior legal We Will advisor. Develop This a plan Tax Reduction will address Plan Asset for Protection, you EACH Tax YEAR. Reduction We make and sure Estate not to use Planning questionable deductions.

38 Sample Blueprint Living Trust S Corp Practice/ Business Owns: Goodwill Holding Company (LLC Taxed as S Corp. FLP Holds all safe assets $$$ FLP Holds a High Risk asset LLC LLC LLC LLC LLC Owns: Equipment Owns: Building Owns: Rental Property Owns: Home Owns: Vacation Home

39 ASSET PROTECTION BLUEPRINT Lawsuit Prevention Estate Protection Tax Management Family Living Trust 2/11/2013 Spouse 1 LLC/FLP Interests, Corp Stock, IRA, Life Insurance Joint Bank Accounts, Vehicles Spouse 2 LLC/FLP Interests, Corp Stock, IRA, Life Insurance Last Will & Testament Trust Package Includes: Durable Powers of Attorney Living Will ABC, LLC (MA) 100% owned by Family Living Trust DEF, PC (MA) (S-corp) Ownership: Spouse 1-100% Asset Management, LLC (AK & MA) (Owns SMLLC interests and 1% GP in FLPs) (Tax as Partnership) Possible Equipment, FLP (MA) (Holds and leases equipment) Ownership: GP: Mgmt LLC 1% LP: Spouse 48.5% LP: Spouse 48.5% LP: Kids 2% Existing Entity Future Entity Homestead Act: Massachusetts $500,000 and $500,000 for each age 62+ or disabled person. -- Mass. Gen. L. Ch , 1A Note: Private retirement plans are exempt except under special garnishment rules regarding child and spousal support. HIJ Land Trust Mgmt LLC as sole beneficiary KLM Land Trust Mgmt LLC as sole beneficiary Ownership: Spouse 1-50% Spouse 2-50% NOP Land Trust Mgmt LLC as sole beneficiary QRS Land Trust Amend to make Mgmt LLC the sole beneficiary TUV, LLC (NV) (amend owner and dist. Auth.) 100% owned by Asset Mgmt, LLC Single Member Disregarded LLC WXY, LLC (NH) (amend owner and dist. Auth.) 100% owned by Asset Mgmt, LLC Single Member Disregarded LLC Safe Asset, FLP (UT) (Holds Bank Accounts, investment accounts, and other safe assets) Ownership: GP: Mgmt LLC 1% LP: Spouse 48.5% LP: Spouse 48.5% LP: Kids 2%

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43 PREMIUM+ Program Cost of $100/mo. (12 months) DOCUMENT REVIEW & ASSESMENT CREATING BLUEPRINT DEVELOP A TAX-REDUCTION PLAN Most accountants do tax returns NOT Tax Reduction Plans. We make sure that the entities you use have a tax reduction purpose. Conduct annual meetings. We will create your Meeting Minutes. We Will Develop a Tax Reduction Plan for you EACH YEAR. We make sure We not to help use ensure Additional questionable there are deductions. no Co-Mingling Benefits of of Funds PREMIUM+: or Representation of Corporate Assets as Personal Assets OBSERVE LEGAL FORMALITIES Annual Blueprints and Tax-Reduction Plans Continual Legal Document Software Updates Continual Legal Consultant Access Initial Trust Consultation Continued Trust Modifications (after creation) Physically Created Documents Prepared and Delivered Continued Observance of Corporate Formalities Reg. Agent Fees Waived*

44 STEP TWO ENTITY CREATION

45 Standard Asset Protection Fees Living Trust $3,500 to $5,000 C Corp Practice/ Business Owns: Goodwill LLC Owns: Equipment LLC Owns: Building LLC Owns: Rental Property LLC Owns: Home LLC Owns: Vacation Home FLP Holds all safe assets $$$ $14,500 - $17,000

46 The Solution Price Per Entity $1, Life Time Package Today $5, Life Time Package Anytime $7,000.00

47 FAQ S On Average we spend 60 hours per client Clients time involved on average is 3-4 hours Should be completed in 6 8 weeks 99% of initial purchasers use the services

48 Q & A Thank You