[Vishnu]

Originally Posted by macerico

I can't comment on most of what you've described. For many, it sounds like real overkill.

***When it comes to protecting your assets from the thieves that rule the roost, how can there be such a thing as overkill?***

If you have nothing IN YOUR NAME, then someone trying to sue you won't get squat unless they can link the company as a party to the action they are suing you for.

***The KEY: It is all owned by the FLP and the corp runs the FLP and holds th liability but hasn't enough assets to make it ( a lawsuit) worth persuing.***


Veil piercing normally will not happen just because a company is a sham used to shelter assets.

***A) The corp is not a sham. It has legitimate business and meets all 10 requirements to prevent being pierced. B) This train of thought is old school. Increasingly, the courts are piercing the corporate shield on such trivialities as Not having a business location, Not having a business phone listing, Not having any third party transactions, Not having a business bank accout...etc...***

Lots of wealthy people and corporations do that, and the courts have a vested interest in letting that status quo stand.

C-Corp = corporation with pretty much no assets worth mentioning.

FLP = Limited partnership with C-Corp as general partner and all others as LIMITED partners

Everything is either titled or listed on the Schedule A of the FLP.

You have the same problem as any corporation shelter arrangement. If YOU are the cause of someone's injury, they can seek YOUR assets.

***Read closely, the corporation hasn't enough hard assets to go after***

However, if that injury involves something that is property of the FLP, then its assets can become subject to the claim as well because the FLP can be brought in as a party.

***This may be true but they cannot take any assets, only "INCOME", the exception being an "INSIDE LAWSUIT". Since the other "LIMITED PARTNERS"are family, this isn't going to happen. The income can only be attached with a "Charging Order" no judgement or leins apply. ***

So, you might want a house titled under a new corporation separate from the FLP/C-Corp but subject to control by those entities.

***This is a grey area. A house, if you live in it, is a medium risk asset and the call is a toss-up. If it is a rental property, then you most certainly want a second FLP to hold the title because lawsuits are always in the mail. The Corp is the General Partner of the FLP. One shouldn't confuse the Corp with the FLP. They are two different animals. ***

This way, if someone got hurt on your property, they can come after you, the LLC/Corp that owns your home, but not the FLP/C-Corp. Have another LLC/Corp for each vehicle, etc.

***Agreed. The vehicle issue is somewhat covered because we are extorted for insurance by the state so it is self healing. If someone gets hurt on the property, they will be guilty of tresspass as I have the property posted with bulletproof signage stating the cannon of law governing Trespass. If you do not hold license to enter the property and have said license on your person for inspection at any time, then you are there at your own risk...including the possibility that I may inflict bodily harm or death. This way if I come home to find someone in the house or attempting to break in then I can shoot them and get away with it. The law routinely jails the person defending thier property as I'm sure you have heard of the cases where some 80 year old man get 20 years for shooting a burgler or the thief wins a lawsuit because you shot him and he claims damages. ***

Save the FLP asset pool for things that are highly unlikely to cause damage to anyone like liquid assets, investments, valuable collectibles, etc.

***Done***

The trust is just a nice way to ensure there are no hang ups when you die for ALL of the sheltered assets going to where you want them to go.

***As I stated. It is part of "The Program" to reduce taxes and protect assets.***

For the interest of protecting both assets and privacy, you often need layer after layer of corporate identities to layer veils between a potential creditor and the assets to be protected.

***Thus the Nevada corp. They have NO reciprocal agreement with the IRS and do not divulge to ANYONE else, worth, income, board members, addresses, shares, etc... It once was that Deleware was best which is why the FED is registered there but Nevada has competed effectively for the business. They now, because of the protections, are the no. 1 filing location for Corporations. ***

Just my 2 cents....I'm educated, but no expert.

You have a very good knowledge base and some excellent opinions and questions. The savings and features of doing it this way are so numerous that it would take hours to explain. For instance, I have a corporate welfare program written into the C-Corp. This way everything that medical insurance doesn't cover becomes a tax deduction for the corp. The corp reimburses the board members for all out of pocket medical expenses. I take care of my 85 yr. old father with alzheimers and since he is an advisory board member, this feature saves a fortune.

The FLP owns my log home business. It hires the corp to run the day to day operations and marketing. The FLP pays the corp. I can move money back and forth this way. The FLP owns the office and all the equipment which it leases to the Corp for thier oprations. Another tax deduction to leverage the tax liability of the corp. This can move money back to the FLP. The rent is so "high" that the corp makes a very thin margin on every home I sell. Plus as a board member, I have a housing provision for my father who lives in the other half of the office/guest house. This way ALL maintenance of the house and office are tax deductible. All utilities as well. My home is also my model-home so it too has all utilities, maintenance, etc...as tax deductions since the home is a showcase for the product plus the housing clause covers me as the President and my wife as Chairman of the board.

It goes on and on so when you stop to consider all these features, when used correctly, and the proper language included, it is a wise structure and a safe structure. You are correct that many wealthy people use this structure but one need not think this way. You'll never get rich unless you stop the biggest hemmoraging wound in your financial life which is WHAT? TAXES...TAXES...TAXES...!!!

If you set up a Charitable Remainder Trust, CRT, then you avoid Capital Gains Taxation because profits from sales of lets say..."Investment Properties" can be used to buy investments that are not "Like Investments." That is the rule as I'm sure you know. If you sell an investment home and buy more investmment homes with the profit then you owe no CGT. But if the CRT owns the investment home (move it in right before sale) then you can reinvest in whatever you wish and avoid CGT. Buy Llamas if you want and no one can say a thing about it. The rule is that you pay ONE NICKLE on the dollar in taxes. Nice HUH? This will make the CRT rich very fast and very versitile so you can spin on a dime and make diversified investments then you set up a family foundation and down the road, designate it as your "Charity of Choice" hire your family to run it and put them on the payroll and keep all the money in the family.... forever!

If this weren't the preferred way, the the Fords, Pews, Carneggies, Rockefellers, et al wouldn't be doing it this way. It's not the way the rich do it...It's the way they do it to get rich. It's never to early or too late to get on the wagon.

Great Discussion! Thanks.

Vishnu