[Vishnu]

Asset Protection Program

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I have read and learned from this discussion. I have a different take on protecting ones assets:

I set up a C-Corp and it is scantily funded (has few inexpensive asssets) I set this up in Nevada for the obvious reasons.

Then I set up a Family Limited Partnership which is much like a LLP but consists of Family Members thus foregoing many of the "official" functions of a LLC. Also, there aren't the funds dispersal issues in the context of "asset protection".

The General Partner is the only person of the FLP who bears liability and the Limited Partners hold interest in per centage and not shares, as in the C-Corp.

The "poor" corporation is the General Partner of the FLP so if the General Partner is the liable party, then there is nothing to get except a calculator and a couple of hundred bucks in a bank account. In other words, there is no good reason to sue or attack the Corporation/General Partner.

Everything I own is "In The FLP". I have titled everything that has a formal title to the FLP and eveything that one owns but has no formal title, such as coin collections, antiques, firearms etc...is listed in the schedule "A" of the FLP thus the FLP has "TAKEN" ownership. The list is extensive and complete so I technically own NOTHING.

Lets suppose someone tries to pierce the FLP to gain assets or income, they will not be able to take any assets in any circumstance but if they find a stupid lawyer and a dumber Judge, then the Judge may actually give them a "Charging Order" thus forcing you to accept them as a Limited Partner. The theory being that as a Limited Partner, they will eventually receive income to match the award from the courts. However, I have included language in the Partnership Agreement, that the General Partner can, at any time, for any reason, and for any lenght of time, withhold dispersal of income to the Limited Partners. This is done by sending a certified letter to the last known address of all the Limitd Partners. The very minute you are aware that someone is suing the FLP, you send the letter. Don't worry because the wheels of Just-Ice turn slowly and before you are required to answer the Complaint, the Limited Partners are mailed and reeceived.

The Plaintiff is now sitting happily by, thinking he/she is going to be paid. BUT NO!!! What they are going to get is a K-1 statement stating they have an interest in the FLP. Lets say they got a 1 million dollar Charging Order, then they will have a 1 million dollar K-1 statement.

Here is the kicker. The IRS Code 11-137 states that a charging order is the same thing as earned income and the TAX on that income is immediately due. They now owe the IRS as much as $300,000.00 and there is nothing they can do about it.

It never really gets this far because as soon as they send you the complaint to answer, you send the Attorney of Record a letter explaining exactly what you will do if they prevail in court and that you own nothing and the FLP will not be dispersing any income as long as the lawsuit is active. Since most of these cases are accepted on "Contingency" the attorney now knows he will not get paid and that he will likely be sued by his client for causing him such dramatic financial damage. The lawsuit will be pulled, the attorney will quit, and your problem is solved.

Now we get to the TRUST part. Both the FLP and the C-Corp are owned by the "Revokable Living Trust" and listed in the schedule-A. When you croak, the corp and FLP collapse and the funds and assets go directly into the Trust by-passing probate and inheritance taxation. Your family, as directed by the list of succession of Trustees, will get thier money and assets and no one can dispute your wishes, or sue, and per the language in your Trust, upon your death the "Revokable Living Trust" becomes "Irrevokable". Your babysitting instructions must be followed as YOU wanted. You dispersal of assets must be complete and clear so the family will not errupt into a huge fight. In my case, I have only one daughter and she is in line to become Trustee upon my death so I don't worry about all that extra paperwork and she becomes wealthy and I can rest in peace knowing the Black Robed Priests of the Admiralty Court and thier sucophantic Esquires can kiss my asstrisk!

One may even go farther with Charitable Remainder Trusts and Family Foundations to perpetuate the wealth for generations.

I did all the legal work myself too so if I can do it, you can too. My favorite attorney checked it out and stated that he has never seen such a tight set of docs and that the "special/extra" clauses allowing me absolute control were very well formed and the language would hold up in any court.

Thanks for your time to listen. I wish everyone the best in protecting your assets. Your thought are welcome.

I am wondering one thing though. With this structure can the mortgage company take my home since it is owned by the FLP, in the event of an economic collapse? This issue wasn't even in my thoughts when I constructed this program.

This method of asset protection was developed by Jay Mitton, known as the father of asset protection.

Vishnu