how to become invincible to lawsuits, save taxes and ... · what level of protection do you need ?...

HOW TO BECOME INVINCIBLE TO Lawsuits, Save Taxes and Preserve

your EstatePresented by Angela Adams

specific Asset Protection strategies

Used by Largest and Most successful companies in america

MARRIOTT HOTELS YANKEE STADIUM

Asset Protection over the last 100 Years

• Gold • Guns

What level of Protection Do you need ?

Our Goal: Common sense strategies used by the biggest companies in America

Balancing the art and the science of Asset Protection

1961 - Foundation for asset protection laws

• Lawsuits got us started

• South Dakota Rancher - Bank Foreclosure

• Attorney modified Language in his documents

• They Won the case

1975 - florida Doctors - 1st Call for seminar

• Average family

• Small estates

• Didn’t matter

• Awareness spread

• Very Wealthy implemented

• 1st Call for doctors

• No Business Training

• Fear Of Lawsuits

Asset Protection Today

• Laws of the land

• State Statutes

• Case Law - ALREADY RULED ON

• Tools cleared by IRS

• NO risky strategies

• NO offshore accounts

• NO experimental theory

• Inviting trouble IRS

7 Yrs. Director of Legal Services

1. Who: Everyone (Know your risks/needs)

2. What: You Need

3. Why: It protects you, your assets & income

4. where: To Get started (FIRST STEPS)

5. How: To implement

Liaison the Asset Protection attorneys

1,000’s of clients

• clients in all facets of business / workplace

• Worked Hard - Don’t want to Lose it

• Panicking - with Pending Lawsuit

• Tired of Taxes

• Estate Planning Concerns

• Extensive Travel Plans

• Divorce, Illness, Surgery

• Parents - elder care issues

• Special Needs children

clients in All 50 States

CPAs & Attorneys

• REALITY: They Don’t know — what they Don’t know !!

• Family of 3 attorneys

• several pawn shops

• 2 antique stores

• over 1000 firearms

MISTAKE: Everything in 1 Partnership

1 in 1,400 Attorneys specialize in asset protection

legal documents

• Sole Proprietor

• Joint Ownership

• C Corp or S Corp

• LLC/Limited Partnership

…All Men are created equal…But Not all Entities or

Documents are Created Equal !

• Charitable remainder Trust

• Revocable Living Trust

• Will/Living Will

• Operating Agreements

Some may guarantee that you LOSE in COURT !

common errors we see

• Legal documents

• Boiler Plate Entities (CPA/Attorney/Legal Zoom)

• Not up to Date

• Missing / Poorly Drafted Operating Agreement

• Trusts — Assuming that a trust provides protection

• Business not separate from personal assets

• Implied Officers

• Entity Formed in Wrong State

• Single vs. Multi Member LLC

• (smllcs: no charging Order Protection only WY & NV)

Threats to Wealth 3 Catagories

LowerTaxes

PreventLawsuits

Eliminate Probate

Solution: “Total Asset Protection”

ENTITLEMENT

1. win the lottery

2. marry into wealth

3. inherit wealth

4. sue somebody

5. study, save, work hard

Boston Students Survey Question: How do you plan to get rich?

get rich quick — on a silver platter

Probate ?

• If something were to happen to you today OR -

• if something were to happen to your parents today -

• Do you know exactly where every dollar that you and your family has accumulated will go ?

• and how fast it will get there ?

Type to enter a caption.

financial surprise

• everyday can be a financial surprise for most adults

• But the biggest surprise is often On the family when you pass away.

• IRS: 93% of Americans havea plan in place to rewardattorney and the IRS.

• ONLY 7% OF AMERICANS HAVEA PLAN IN PLACE TO FULLY PASSTHEIR ESTATE ON TO THIER FAMILIES AND HEIRS.


Taxes

Toll Roads Free Roads

Solution

Taxes

Capital Gains Tax Income Tax

TOOLS

•Revocable Living Trust

•Charitable Remainder Trust (CRT)

•FAMILY FOUNDATION

Sole Proprietor

LLC Taxed as C or S Corp

Consultation with your C.P.A.

C-Corp. Fringe Benefits

• 100% MEDICAL

•Chiropractor

•Supplements

•Prescribed Exercise Equipment


C-Corp. Fringe Benefits

• AUTOMOBILE

• MILEAGE - app

• TRAVEL

• Hotels

• Corporate Retreats

• Meals

• Clothing replacement costs

Request - C-Corp. Fringe Benefits

• HOME & OFFICE

• Internet

• Cell Phones

• EDUCATION

• SEMINARS

• RETIREMENT PLANS

• MANY MANY MORE…

LAWSUITS

•Destroys Marriages

•Destroys Families

•Destroys Businesses

•Destroys Health

•Destroys Legacies

SOURCES OF LAWSUITS

1. Divorce

2. Employee Actions

3. Guest Accidents at Home

4. Joint Ownership Pitfalls

5. If Spouse or Children are Sued

6. Time Traveling Lawsuits

7. Owning an Asset

8. Implied Corporate Officer

9. Insurance May Not Cover You

Vicarious Liability

Implied Officer

Driving A Vehicle

Property Ownership Liability

Tenants

Suit Today for an Act 10 Years ago

Time Traveling Lawsuits

WHAT ATTORNEYS LOOK FOR

1. How much Insurance You Have

2. How You Own Your Assets

Does Insurance protect you ?

Insurance is Like a Picket Fence

Home Real EstateBusiness

Assets

Safe

Assets

Appreciated

Assets

Gaps - exclusions & Exceptions that leave you vulnerable

Asset Protection is Unique

• No Cookie Cutter solutions

• Custom Analysis

• State Laws

• Assets

• Risks

• Family

» It’s like Brushing your Teeth legally

» Planning must be in place before anEvent Occurs!

`

Timing Is

Critical

Managers & Employees Liability

Tools For Total Asset Protection

Taxes Lawsuits

LLC (C-CORP) & CRT Llc & Flp LIVING TRUST

PROBATE

Your Business

• LLC: owns land & Buildings

• Corp/LLC: Controls & manages–owns inventory, supplies, receivables. –Leases land/buildings

(Corp shouldn’t own Real estate)

• Lower Insurances (Less of a target)

Control Everything & Own Nothing

Taxes and Protection

- C Corp: usually has best tax advantages — *fringe benefit list

- S Corporation: still good, especially when starting out and not profitable

- Both S or C great for control management

- Real Estate - in Asset Protection LLCs

The ‘missing link’ for most businesses.

best tax benefits

LLC-taxed as corp - strategy

- create LLC (taxed as C-Corp) - on the outside of other businesses. (just immediate family)

- Have LLC Provide services: cleaning/billing/consulting to other larger business.

Use the income flow into (small LLC-taxed as c-corp) to pay for fringe benefits for just the few members!!

GET the LIST!! Medical, travel, corporate retreat etc…

Corp Veil Routinely Pierced

• Common mistakes:

- Not keeping entity current with the state- Not filing taxes timely - No Meeting Minutes- No Stock Certificates issued for shares- Paying for personal out of business checkbook- Not having enough money to be liquid

***Believing corporate veil gives unlimited protection

LLCs and LAWSUITS

- Lawsuits different today

- Fault doesn’t matter

- Expensive to defend

- lawsuit prevention - Most attorney don’t know.

- Use FLP/LLC as your barrier to lawsuits

Corporation- Asset Protection States

Alaska, Wyoming, Nevada, & Delawaremade Asset Protection Entities - their states business

Statutes Judges case law

Your Personal assets or interest can be placed In a FLP or LLC where it will have bulletproof protection

It’s Very Affordable - Registered Agent

- 60% of Fortune 500 - Delaware headquarters.

- 90% of US Fortune 100 - Nevada headquarters

Typical Lawsuit

- GUILTY judgement !

- Judgment is filed

- writ of attachment

- Writ of Execution

- Take your Property

- Real Estate & personal Property

Lawsuit with FLP/LLC

•NEVER A JUDGMENT

•ALWAYS A CHARGING ORDER

Charging Order Genius

Never take assets - all 50 states

Can take all net earnings

OA: Paragraph 2.9:

NO: MANDITORY DISTRIBUTION

YES: DISCRETIONARY - NON-PRORATA

But: IRS WANTS TO GET PAID on the Income

IRS 77-137

Creditor now must pay income taxes

even if no income is distributed!

3 Reasons - Attorneys won’t want to sue

1. Proper LLC **Charging Order Can’t take Assets

2. Good O.A. **Discretionary Distributions

3. 77-137 Still Must pay tax on Award

**IF it’s properly created & drafted

1+2+3 = Lawsuit Prevention

LLCs Insulate & Isolate

– Inside-out Protection

– Outside-in Protection

group assets according to risk and equity

Art vs Science — Containers

LLC for Your HOME

– Wy or Ak LLC

– properly formed

– Maintain Primary Residence Benefits

– On Blue print


FLP - SAFE Non-Risky Assets

– Cash, savings, bonds, stocks, CDs

– Jewelry, Precious Metals, Diamonds

– Artwork, Antiques, Collectables

– High end furnishings

– Anything that doesn’t carry Risk

– (No GUNS, No Cars, No swords)

FLP


– Alaska FLP

– Private list

– schedule A

– Notarize

Getting Entities in Order

• Review by qualified attorney

•Home Protected

•Business Protected

•Taxes Minimized

•Assets Protected

•Lawsuit Protection Language Docs

•Family/Children

•Estate Plan - Ties it all together

What Happens to Your Estate?

WILL:

- Must be probated

- estate is turned over to the legal system, chaos, long, expensive

- Estate becomes public - no privacy

- 25% CONTESTED

- long and costly

- must be paid before closing

-Capital Gains taxes

Why A Trust ?

Revocable Living Trust

- Avoids probate

- Private

- saves time, money and heartache

- No Attorney Fees for Probate %

- More control than a will

- Pass authority to trustee after death

- Pour Over Will & **Portability

- Spend Thrift Provision/Special Needs

PARTS OF THE TRUST

• Schedule A:Assets, home, bank accounts, cars, Interest in

businesses/LLC/LP/Corp

• POUR OVER WILL, part of lt

• Power of Attorney

• Medical Directives

• must fund LT

• Notarizing - Establishes time

Charitable Remainder Trusts

- Eliminates Capital Gains on the Sale

- Asset Protection

- Best Retirement Account

- Accumulates 5-7% Average

- Only pay taxes on withdraw

- Can take 10% per year

IRS Code 664(d)

-

Pay Family not Charity

- Form Family Foundation

- Kids manage

- CRT pays FF at Second Death

- No estate taxes

total planning - Case Study

Case Study:

Asset Protection - Estate Planning - Taxes

Total Asset Protection

How does this Apply To You?

Home Real Estate Business Assets

Living Trust

Schedule A

FF

CRT

Corporation OR

LLC taxed as C/S

Tax SAVINGS

General Partner

llc/lpllc/lpllc/ltHome

llcR.E.

FL.P.Safe Equip. R.E.

Leasing

Safe Assets AppreciatedAssets

Managers, Coaches & Owners Business & Tax saving

Funding

Sample Blueprint