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A good asset protection plan puts dangerous assets
in limited liability companies (LLCs). There should be a separate
LLC for each dangerous asset in order to insulate your other assets
from liability arising from this dangerous asset. By insulating
the asset with its own LLC, only this asset will be taken if a judgment
arises against the LLC. A judgment against any of the members will
result in a charging order only against any distributions to be
made to the member. In other words, a judgment against you will
not affect the asset in the LLC.
One of the greatest advantages of the LLC is that it is an extremely
effective liability shield (for which you pay a $800 yearly Franchise
tax deposit in California), yet is able to operate as a sole proprietorship
or partnership with income passing through to its members in lieu
of corporate taxation. In California there is also a fee based on
gross income due after income exceeds $250,000.
Each state has unique laws that pertain to LLCs. In California,
there are many restrictions applicable to who can and cannot operate
as an LLC and how many members are required. An LLC can be operated
as a pass-through entity or a corporation depending upon the choices
it makes and the way it operates.
You can now shelter your home with an
LLC
The IRS has now come out with rulings that allow us to shelter
our principal residences and vacations homes in single member LLCs
and in two member husband and wife LLCs in community property states.
Instead of completely divesting yourself of ownership and control
with a Qualified Personal Residence Trust, the LLC can be used to
asset protect your home (and second home).
In our simplified asset protection plan, with exceptions, your
safe assets are transferred to a family limited partnership, your
home and/or vacation home are transferred to an LLC if you still
may need to refinance your home or a qualified personal residence
trust if not, your business is transferred to an LLC or S corp.
depending on the type of business, rental or commercial real estate
is transferred to an LLC and the remainder of the assets go to the
FLP. All interests in these entities are held by your living trust.
If you are interested in setting up your own LLC in California,
go to our Products page. We should
have an LLC start up kit available in all states soon.
What is the difference between
a limited liability company and a limited partnership?
What is the difference between
a limited liability company and a limited liability partnership?
Advantages of the LLC/LLP
What types of businesses can
operate as LLCs or LLPs in California?
Which state is the best choice to
set up your LLC?
Does California recognize single member limited
liability companies?
Taxation of LLCs & FLPs
Gift tax reporting
Current Estate & Gift Tax
laws
As an LLC what forms do I use to file a
return?
Our fees to set up a stand-alone LLC
What you do after we set up your LLC
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