Wealth Protection Secrets of a Millionaire Real Estate Investor :
William Bronchick
Family Limited Partnership
This is an LP formed between family members. If the husband (limited partner) is sued, the wife as general partner can decline to distribute income, instead reinvesting it in the partnership. The judgment creditor can not collect but will be liable for the taxes. This is similar to a multiple member LLC with a managing member and a nonmanaging member.
If the general partner (wife) is sued, then the partnership can buy out her interest. The partnership then finds a new general partner.
It is useful for estate planning as well.
General
Separate safe and risky assets. Separate business from personal assets. Beef up any homestead protection that you have.
IRS
The IRS has a 3 year statute of limitations for auditing returns. It is 6 years if you fail to report income in excess of 25% of the amount stated on your return. But there is no limitation if a false or fraudulent return is filed with the intent to evade tax.
There is an "offer in compromise" program that allows you to settle your debt for less than the IRS thinks you owe.
All asset protection plans should include elements of
- estate planning
- gift or charitable purpose
- income tax reduction
- prestige of a corporation
From one of his newsletters:
OK, you set up and LLC or corporation to protect you, then you end up losing protection because you don't sign your name correctly. Common things I see is a person signing leases and contracts with their own name instead of on behalf of their LLC. The correct ways to sign are as follows:
"Joe Investor as Manager for Quality Property Investments, LLC"
"Quality Property Investments, LLC, by Joe Investor, it's Manager"
"Joe Investor as Member of Quality Property Investments, LLC"
"Quality Property Investments, LLC, by Joe Investor, it's authorized Member"
"Quality Property Investments, Inc., by Joe Investor, President"
"Joe Investor as Vice-President of Quality Property Investments, Inc."
Note, if your LLC has a manager (or managers), a manager must sign; if it does not have a manager, then any member can sign. Check your LLC organizational documents to be sure.
The type of lien that CAN be filed without a court judgment is a mechanic's lien. A mechanic's lien is a claim against a specific property for work done or materials provided for that specific property. Each state has different rules and laws on the procedure, which can be found at
www.nationallienlaw.com. In general, a mechanics lien only lasts a short time, usually less than a year, then the person filing the lien must commence a lawsuit or the lien will be null and void.
William Bronchick Wealth Protection Secrets (start page)
