just a thought .. i do have some properity , i own my business, i dont have a corporation, all these assets i think must be protected . i am not sure which direction to go . i have heard that in forming a corporation you are some what protected from future myham etc. i am eager to be advised on this issue . thanks
The "best" way will depend on your choices. For every asset protection device there is typically a drawback - and you need to weigh those benefits and drawbacks yourself.
As a general rule, a corporation is typically the best way to protect an asset. However, you need to learn the tax consequences. There are many, and you should teach yourself about pre-tax expenditures, the consequences of transferring assets into or out of a corporation, and the important estate and gift tax consequences. Corporations are the ultimate estate and asset protection devices, but are complex, and worth it if you teach yourself.
Gifting and trusts are also very solid means for asset protection. However, you lose rights to the property if you truly want to protect the asset. So a deep conversation with an estate planner should be on the "to do" list.
Matthew Johnson phone# 206.747.0313 is licensed in the State of Washington and performs bankruptcy, short sale negotiations, and estate planning in Whatcom, Skagit, Snohomish, King and Pierce counties. The response does not constitute specific legal advice, which would require a full inquiry by the attorney into the complete background of the facts and circumstances surrounding this matter; rather, it is intended to be general legal information based on the limited information provided by the inquirer; it This response also does not constitute the establishment of an attorney-client relationship, which can only be established after a conflict of interest evaluation is completed, your case is accepted, and a fee agreement is signed. Johnson Legal Group, PLLC
Your detailed situation will define the best advice. You need a team you can work with in the long term, consisting of an attorney, a CPA and an insurance agent. Combining asset protection with estate planning is probably most efficient, and any program that omits insurance coverage is probably inefficient.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
Corporations offer protection against corporate debt being asserted against shareholders. There are various choices of entities such as C, S corporations, LLCs and family limited partnerships. Isolating troublesome assets into one corporation is often used as a protection strategy. There are also income, estate and gift tax implications. You need to sit down immediately with an experienced estate and tax attotney to get moving on these items.
For more on estate planning and other issues, see Estate Planning Mistakes: 5 Not So Easy Pieces at http://www.sjfpc.com/estate_planning_drafting_wills_trusts.html. Please hit the like button at the end of the article if you found it helpful.
For a discussion of choice of entity please see Choice of Legal Entity for your Business at http://www.sjfpc.com/choice_of_legal_entity.html.
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is firstname.lastname@example.org , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
A sound asset protection plan is tax neutral, and does not compromize ownership or control. You want to protect your risky assets (your business, investment properties) and at the same time isolate the liabilities they generate from your non-risky assets (bank and brokerage accounts).
There is a big misunderstanding out there that Revocable Living Trusts, Family Trusts, Land Trusts and similars do protect you from lawsuits. The same applies for LLC's. They don't. They are efficient legal tools that have a specific purpose (tax, inheritance, business planning) .
You want to seek advice with an attorney that specializes in asset protection planning.
Douglass Lodmell is the nations #1 Asset Protection attorney and has clients in all 50 states, protecting over $4 Billion in client assets. Answers given by him in this forum do not establish an attorney-client relation. He advises to seek a specialized attorney in the area of your interest for legal representation.
Estate Planning Attorney
It is important to protect your assets for your own use and for your heirs. A corporation can be a valuable asset protection device in the right situation. Establishing a corporation also has income tax ramifications, so your particular situation must be carefully analyzed. You are welcome to call our office for a consultation regarding your situation. Best wishes as you evaluate your options!
Please understand that this communication does not create an attorney-client relationship.