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Tag Archive for Asset Protection

Five Fundamentals Of A Limited Liability Company (LLC)

Haik Chilingaryan, Five Fundamentals Of An LLC

A Limited Liability Company (“LLC”) is a hybrid business entity which contains elements of a partnership and a corporation. LLCs consist of members and managers. An LLC may provide tremendous benefits for its members, which include asset protection, intergenerational transfers, tax saving strategies, wealth preservation, flexible management structures, and clarity on the roles of all essential parties involved in the company as set out in the Operating Agreement.

The following five concepts are fundamental for establishing an LLC: Asset Protection, Intergenerational Transfers, Tax Saving Strategies, Management, and Funding.

Asset Protection

Generally, the more assets a person owns in one’s name, the more likely it is that he or she will be a target mark for creditors. This is why it’s good practice to own as little as possible in your own name. In order to accomplish this goal, it’s important to evaluate the types of asset protections tools that are available to you. An LLC is one such tool that is effective for asset protection purposes.

For creditors of the LLC itself, a member’s personal liability will generally be limited to the amount of the member’s investment in the LLC unless the member personally guarantees the transaction in question.

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Analyzing In Re Portnoy (Asset Protection Case)

In re Portnoy, 201 B.R. 685 (Bankr. S.D.N.Y., 1996) — a 1996 Bankruptcy case – was the first in a series of decisions with a foreign asset protection trust. As with most foreign trust cases, the fact pattern alludes to several areas of law – asset protection, bankruptcy, conflict of laws and trusts. Here are the relevant events in chronological order.

3/87: Portnoy guarantees all loans and debt of his company Mary Drawers (MD) Read more

Who Should Form A Captive Insurance Company?

I’m pleased to announce that, in conjunction with the great people at the TaxConnections website, we’ve published a new book on captive insurance titled “Who Should Form a Captive Insurance Company?”.  You can buy a copy HERE.  Cost: $4.98.

To help potential captive owners and professionals determine if forming a captive is the right decision for them, I’ve written the “10 questions” one of which is, “Have I started an asset protection plan?”

The phrase “asset protection” is bandied about a great deal. There are websites that claim to provide “asset protection” advice and services, various companies who continually tell us about the importance of asset protection and numerous books that help Read more

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