Both books, The Asset Protection Manual and The Boston Tea Party both offers information about assets and how they should be utilized in terms of management and protection from unsuccessful business ventures or tax miscalculations. Here’s another case to look at, and it concerns asset protection.

The judgment in a case that involved a single member limited liability company (SMLLC) and a creditor being allowed to get ahold of the defendant’s business assets instigated controversial discussion among practitioners about whether SMLCC is secured by the same charging order protection that secures multi-member LLC. This and all about asset protection, a subject discussed responsibly and intelligently in my book, The Asset Protection Manual.

In the case of Meyer  V. Christie, the District Court of Kansas released a charging order against an SMLLC that allowed creditors to reach the assets of the debtor’s limited … Read More »

Asset Protection is not too different than life itself. It can grind you into the dust, or it can be a breeze—all of that depends on how much work you put into both. If you want to strengthen your Asset Protection, get a plan. You might need an example of that, so let me describe to you a little situation I recently had: yesterday, a client rang me up. He was in a whole heap of trouble, you see, as he had just figured out he owed $600,000 to the IRS thanks to bungled taxes.

That is one large amount of money—I don’t have to tell you that—to owe, but my client kept his calm. The client was sorry for his mistake and wanted to give the IRS their fair share, but he needed to be able to do that at … Read More »

Family Law these sorts of issues are never pretty, but in a “supportive relationship” case being able to confirm (or deny) the location of a person can be key to proving its cohabitation element. Although most states do have laws that provide for reduction/termination of alimony if the ex-spouse is cohabiting with the opposite sex in a way that is “in the manner of husband and wife, mutually assuming those rights and duties usually attendant upon the marriage relationship,” what counts as a “supportive relationship” is not always clear.

A common go-to in proving these cases is video surveillance. Unfortunately, while the video can record the two opposite sex cohabiting day-to-day, it is also quite expensive, as you need to prove overnight stays over a long period of time.

Thanks to the commonness of cell phones as main mode of communication, Cell … Read More »

Read on, and be forewarned come next tax season.

Deadlines,

In case you are living overseas, or a member of the U.S. military deployed beyond the United States, then you probably already know that the date for filing your tax return is automatically extended by two months. June 15, not April 15, is when they are due.

However, if you failed to meet the June deadline for filing your tax return, then there are two possible extensions you might take. The first extension, if filed on/before the June 15 deadline, will extend the filing date to October 18. Careful note must be made that this is not an extension of time to pay your tax that you may owe, but to file it. Also key to recall is that interest, which stands at 4%/year (compounded daily) is made on any payment made after … Read More »

Has an “expert” ever told you that if you own a property as a tenant of the entirety that you cannot utilize the property to satisfy just one tenant’s debt?

Most people will likely answer “yes” to the above question, and it might come as a surprise when I say that the “experts” are incorrect. This is a common asset protection myth that I broke down by purchasing beneficial interest from a spendthrift protected trust.

Again, if you ask an “expert” about this topic, they will tell you that the beneficial interest cannot be removed from the beneficiary due to the spendthrift protection. In most occasions, they are correct about that. If you browse the bankruptcy code, you will usually see specific language dedicated to clarifying how the spendthrift protection stops the trust and its assets from even being involved in a … Read More »

Should you take part in Asset Protection?

By: Michael Scott Ioane, 2010

At some time in your life you may be asked to play the role of a “friendly party” in another person’s asset protection program. Your relationship with this person would probably be one at a deep level of trust and understanding as you would not have been asked to take on the task otherwise. This would either make it easy for you to say “yes” or make it difficult for you to say “no”. Before you decide, read along to learn more about what you are being asked to do so that you can make an informed choice.

Get as much information as you can from the person wishing to involve you in his plans. Then, consult with an expert as laws vary from state to state and hardly remain constant … Read More »

Documentation for Defense

By: Michael Scott Ioane, 2010

Keeping records is always important. It is what real businesses do to keep track of all its transactions and monitor its own activity. You may be thinking that documentation exposes you to more scrutiny. Well, just keep in mind that you may have no choice at some point but to be the target of such scrutiny. It is possible that you must deal with an IRS audit.

As record keeping is something you must do anyway, turn it to your advantage by using it to play part of your defense. The biggest problem for asset protection plans is to be found fraudulent. You can avoid this by documenting your transactions to demonstrate transparency.

First, you must decide on an accounting method. The cash method allows you to report revenue in the year that money comes in … Read More »

Protection for your Liquid Assets

By: Michael Scott Ioane, 2010

Your assets may be in the form of cash. Take note that this is very easy to target and is therefore easily lost. If you think that keeping money in the bank provides enough protection then you are mistaken. The Internal Revenue Service (IRS) can “request” that your funds be turned over by the bank. This is possible because of the fine print in the agreement you signed when you opened your bank account.

Not only are banks unlikely to fight the IRS for you, they also are poor custodians of privacy. Not only do they require you to give personal and financial information, they also monitor the activities made through your account. A single withdrawal worth $10,000 would trigger a report for such activity. Even multiple withdrawals per day are tagged as … Read More »

Defending an Earning Business

By: Michael Scott Ioane, 2010

There would be occasions when your protection requirements go beyond estate planning and the holding of properties and assets. If you run your own business, you should consider how you can defend the properties, assets and profits of that business. In general, you can form one of three business entities: a C corporation, a Limited Partnership (LP) or a Limited Liability Company (LLC).

There are reasons for and against each type of business entity. A C corporation is a good idea if you want to be capable of easily transferring its ownership. It’s a way to quickly raise capital by offering shares of stocks. A Limited Partnership offers less tax liability. If there is no intention to transfer ownership or decrease tax obligations, an LLC should be the best option.

Once you have decided on … Read More »

Equity Stripping for Asset Protection

By: Michael Scott Ioane, 2010

Equity stripping is a lesser known technique of asset protection. Often, it uses liens to achieve the purpose. As a person interested in asset protection, your first two questions may as well be: “what is a lien” and “how do liens bring about equity stripping”.

A lien is simply a claim made on an asset or property to ensure that a debt would be paid. The person or entity owed an amount or obligation is called a creditor and he is the one given a claim on the asset. A good example is a mortgage. The bank puts a lien on your house to make sure that you pay your monthly dues. It is the creditor. If you fail to make payments, the bank may take the house and sell it.

Multiple liens may … Read More »